WSR January 2015 by IHRIM Publication

January 2015

The Official Journal of the International Association for Human Resource Information Management

IHRIM.ORG

DISRUPTIVE HRIS: New Technologies are Changing the Way Organizations Manage and Interact with their Human Capital.

See 2015 Annual Buyerâ&#x20AC;&#x2122;s Guide on Page 24

Contents

Volume 6, Number 1 • January 2015

features 2015 Annual Buyer’s Guide

Page 24

columns From the Editors

Erik Alvarado, lead editor Freddye Silverman, editor Michael Rudnick, editor

Multidimensional Workforce

Digital Technology Demand is Transforming HR By Jill Goldstein, Accenture

Executive Interview

Featuring JoAnne Kruse, CHRO of Amex Travel

Success Networks

By Stephen Garcia, Philosophy IB and Greg Wallace, SYNAPP

Top 5 Employee Referral Program Best Practices for 2015 By Hilary Dunn, Zao

Organizational network analysis is a critical tool for HR leaders today. Whether your top priority is identifying emerging talent earlier, developing key 21st century leadership skills like collaboration and influence or making sure your employees are engaged, insights from ONA will radically increase your visibility and help increase the impact of all your programs.

The CFO and CHRO Guide to Employee Attrition

Product Focus

The Back Story

Why What You Did Yesterday Won’t Work Tomorrow By Katherine Jones, Bersin by Deloitte

By Pasha Roberts, Talent Analytics The metrics introduced in this article – employee value, survival and employee lifetime value – go beyond HR to serve enterprise goals. They are key indicators of how employees – the people that HR hired – are lasting and performing. Performance is the true employee metric that business cares about.

Reimagining the Role of HR

By Ben Peterson, BambooHR There are smarter ways to do employee management and bigger issues that HR can tackle for greater impact and productivity. HR professionals are too important and valuable to be spending time on tedious processes. They are taking on bigger workplace matters, and technology is a key enabler helping them take on more meaningful, impactful work.

The Rise of the Employee-Centric Workplace

By Joshua Reeves, ZenPayroll The movement toward an employee-centric workplace is a good thing for employees and for business. With empowered employees who feel appreciated, you now have teammates who are as driven to help the company succeed as you are. The balance of power in the workplace is leveling, and it is great for all.

The Problem is HR – Not HR Technology

By Brian S. Sommer, TechVentive, Inc. The recession is over and HR needs some serious retooling. Human Resources needs new/different/ additional talent and new technology. Human Resources data is no longer constrained to traditional HR transaction systems. The information needed to competitively hire and retain great people rests in digital water coolers, social media, powerful analytics and more.

HR Technology: Not Just for HR Administrators Anymore By Cecile Leroux, Ultimate Software It’s time to put the person first when designing HR technology before it’s too late. Invest in a solution now that your employees will be delighted to use, or pay the price in employee engagement and lost productivity later. A poor user experience isn’t a mere inconvenience or frustration – it has a tangible negative impact on your talent and, eventually, your bottom line.

Workforce Solutions Review (ISSN 2154-6975) is published bi-monthly for the International Association for Human Resource Information Management by Futura Publishing LLC, 20505 Live Oak St., Leander, TX 78641-9273. Subscription rates can be found at www.ihrimpublications.com. Please send address corrections to Workforce Solutions Review at the address above. www.ihrim.org • Workforce Solutions Review • January 2015

Volume 6, Number 1 • January 2015

Workforce Solutions Review is a publication of the International Association for Human Resource Information Management, whose mission is to be the leading professional association for knowledge, education and solutions supporting human capital management. Opinions expressed herein are not necessarily those of the editors, the IHRIM board of directors or the membership.

MARK BENNETT, Oracle Corp., Redwood Shores, CA USA mark.bennett@oracle.com

LEXY MARTIN, Independent Consultant/Researcher, Meadow Vista, CA Lexy.martin1@gmail.com

ERIK BERGGREN, VP, Customer Results & Global Research, Success Factors, San Mateo, CA USA eberggren@successfactors.com

BRIAN RETZLAFF, Head of IT for HR, Legal & Communications, ING US Insurance Americas, Atlanta, GA USA brian.retzlaff@us.ing.com

JOSH BERSIN, Principal and Founder, Bersin by Deloitte, Oakland, CA USA jbersin@bersin.com

NAOMI LEE BLOOM, Managing Partner, Bloom & Wallace, Fort Myers, FL USA naomibloom@mindspring.com

LISA ROWAN, Program Director, HR, Learning & Talent Strategies, IDC, Framingham, MA USA lrowan@idc.com

EDITORIAL COMMITTEE Managing Editor SCOTT BOLMAN, HR Service Delivery Market Leader, Towers Watson, Chicago, IL USA, Scott.Bolman@towerswatson.com

Co-Managing Editor SHAWN FITZGERALD, PMP, SPHR, Director, Talent Aquisition, DeVry Education Group, Downers Grove, IL USA sfitzgerald@devrygroup.com

Past Managing Editor ED COLBY, Managing Principal and Technology Evangelist, PRO HCM Solutions, Chapel Hill, NC USA edcolby@gmail.com

Academic Editor KAREN BEAMAN, Managing Director, Teilasa Global, former CEO/Founder, Jeitosa Group International, San Francisco, CA USA karen.beaman@teilasa.com

Associate Editors ERIK ALVARADO, Senior Manager, Deloitte Consulting LLP eralvarado@deloitte.com

YVETTE CAMERON, Research Director, HCM Technologies, Gartner, Littleton, CO Yvette.Cameron@garter.com LEW CONNER, Executive Director, Higher Education User Group, Gilbert, AZ USA lconner@heug.org ELENA M. ORDÓÑEZ DEL CAMPO, Senior VP Globalization Services, SAP AG, Frankfurt, Germany elena.ordonez@sap.com LARRY DUNIVAN, SVP Products and Technology, Ceridian larry.dunivan@ceridian.com GARY DURBIN, Chief Technology Officer, SynchSource, Oakland, CA USA hacker@synchsource.com Dr. CHARLES H. FAY, Professor, School of Management & Labor Relations, Rutgers University, Highland Park, NJ USA cfay@smlr.rutgers.edu

CARL C. HOFFMANN, Director, Human Capital Management & Performance LLC, Chapel Hill, NC USA cc_hoffmann@yahoo.com

DR. KATHERINE JONES, HCM Research, Bersin by Deloitte, San Mateo, CA USA kathjones@deloitte.com

ERIC LESSER, Research Director, IBM Institute for Business Value, Boston, MA USA elesser@us.ibm.com

SYNCO JONKEREN, VP, HCM Applications Product Development & Management, EMEA, The Netherlands synco.jonkeren@oracle.com

BRUNO QUERENET, HR Technology Executive, High-Tech and Medical Industries, Sunnyvale, CA USA bruno.querenet@gmail.com

MICHAEL J. KAVANAGH, Professor Emeritus of Management, State University of Albany (SUNY), Albany, NY USA mickey.kavanagh@gmail.com

MICHAEL RUDNICK, Vice President, Principal Consultant, Logical Design Solutions, New York, NY USA michael.rudnick@gmail.com

BOB KAUNERT, Principal, Towers Watson, Philadelphia, PA USA robert.kaunert@towerswatson.com

January 2015 • Workforce Solutions Review • www.ihrim.org

IHRIM BOARD OF DIRECTORS Officers Chair SHERRY TIMMERMAN, Partner/Senior Consultant, Apex Performance Consultants Ltd

Chief Financial Officer GARY MORLOCK, HRIP, Senior TRM Project Manager, Qualcomm Inc.

CATHERINE ANN HONEY, VP, Customer Services, Radius Worldwide catherine.honey@comcast.net

CECILE ALPER-LEROUX, VP Product Strategy and Development, Ultimate Software, Weston, FL cecile_leroux@ultimatesoftware.com

DR. MARY YOUNG, Principal Researcher, Human Capital, The Conference Board, New York, NY USA mary.young@conference-board.org

ALSEN HSEIN, President,Take5 People Limited, Shanghai, PRC Alsen@take5people.com

ROBERT C. GREENE, Channels Account Executive and Sales Training Manager, Ascentis, San Mateo, CA USA rcgreene@mindspring.com

EDITORIAL ADVISORY BOARD

DAVE ULRICH, Professor, University of Michigan, Ann Arbor, MI USA dou@umich.edu

Vice Chair JAMES PETTIT, HRIP, HRIS Manager, Project Byrd Kimberly-Clark Corporation

JIM HOLINCHECK, Vice President, Services Strategy & Marketing, Workday, Inc. james.holincheck@workday.com

FREDDYE SILVERMAN, CEO, Silver Bullet Solutions, Baltimore, MD USA, freddye.silverman@mysilverbulletsolutions.com

MARK SMITH, CEO, Chief Research Officer, and Founder of Ventana Research, San Ramon, CA USA mark.smith@ventanaresearch.com

DR. URSULA CHRISTINA FELLBERG, Owner & Managing Director, UCF-StrategieBeraterin, Munich, Germany ucfell@mac.com

DAVID GABRIEL, Ed.D., Global Reach Leadership, Berkleley, CA davidcgabriel@gmail.com

JEFF HIGGINS, CEO, Human Capital Management Institute, Marina Del Rey, CA USA jeff.higgins@hcminst.com

Dr. DANIEL SULLIVAN, Professor of International Business, University of Delaware, Newark, Delaware USA sullivad@lerner.udel.edu

Secretary DAVE BINDA, HRIP, CHRP, CCP, President , HR Results, Ltd. Past Chair Kevin Carlson, Ph.D., Pamplin College of Business, Virginia Tech

Directors JOYCE BROWN, HRIP, Brink’s Inc. MIKE HARMER, Intermountain Healthcare JAMES LEHMAN, Results Driven Consulting, LLC KEVIN MURPHY, HRIP, Murphy Management Consultants STUART RUDNER, Rudner MacDonald LLP

IHRIM Executive Director TODD S. MANN

BILL KUTIK, Technology Columnist, Human Resource Executive, Westport, CT USA bkutik@earthlink.net

PUBLISHING INFORMATION

DAVID LUDLOW, Global VP, HCM Solutions, SAP, Palo Alto, CA David.ludlow@sap.com

TOM FAULKNER, Publisher, Futura Publishing LLC, Austin, TX USA, tomf@futurapublishing.com

RHONDA P. MARCUCCI, CPA, Consultant for GruppoMarcucci, Chicago, IL USA rhonda@gruppomarcucci-usa.com

PATTY HUBER, Advertising Manager, Austin, TX USA phuber2@austin.rr.com

Erik Alvarado, Lead Editor Erik is a senior manager with Deloitte Consulting LLP. He specializes in the design, implementation and management of integrated HR processes, services and HR technology portfolios for global organizations across multiple industries. His 16 years of global experience covers the management of HR operations capability assessments to support human capital and business strategies, facilitation of global fit/gap, roadmap and strategy executive workshops, HCM technology vendor evaluations and selection, business process design, and subsequent implementations. He is the former architect and CEO of one of the first integrated talent management software products. He can be reached at eralvarado@deloitte.com. Freddye Silverman, Editor Freddye L. Silverman is an independent consultant and principal of Silver Bullet Solutions and has been in the HRIS field since 1986. Previously, she was the vice president, Eastern Region of Jeitosa Group, a global HR technology consulting firm. As a practitioner with several international corporations, she was responsible for strategic planning and oversight of all global HR systems and the U.S. payroll system. She also had oversight of the design and development of HR Service Centers and managed HRIS outsourcing relationships. Silverman has been actively involved in the International Association for Human Resource Information Management (IHRIM) since 1986, serving as chapter president, Association board member and president of the International Association. She is a frequent presenter at industry events and since 2008 has been the executive director of the HR Technology Solutions Network for Executive Networks. She has a B.A. in Spanish from Adelphi University, a Master’s degree in Education from Towson University and taught Spanish at the secondary and university level before making a career change into IT. She can be reached at freddye.silverman@mysilverbulletsolutions.com. Michael Rudnick, Editor Michael is a vice president and principal consultant at Logical Design Solutions, Inc. He is a results-oriented, global executive with more than 25 years of experience and a proven track record creating, growing and leading large global professional service practices, enterprise software and product strategy, and startups. Prior to joining the executive team at LDS, he was the global practice leader for Portals and Collaboration Solutions at Towers Watson, managing director at Groundswell; senior vice president of Global B2E/B2B Solutions at Xceed, and the founder/ managing director of Cognitive Communications, an intranet firm that provided consulting and implementation services since the birth of the browser. Rudnick is an internationally recognized author and speaker, often quoted in industry trade publications. He can be reached at michael.rudnick@gmail.com.

from the editors Welcome to an issue that focuses on disruptive trends in HR. According to the Merriam-Webster dictionary to disrupt is “to cause (something) to be unable to continue in the normal way: to interrupt the normal progress or activity of (something).” The term usually engenders images of drastic and immediate change, of a quantum leap to a new state of being. This is not always the case. A disruption might be a relatively small change in process, of strategy, or the introduction of a new technology that changes the way an organization thinks, the way it acts, the way it manages human capital, potentially causing a significant impact to the organization itself and how employees relate to it. Personal and professional networks are usually important in business, yet may not be considered when organizational changes are made or when reorganizations occur. We begin with an article from Dr. Stephen Garcia of PhilosophyIB and Greg Wallace of SYNAPP on “Success Networks.” Their article describes how personal networks can now be measured, represented and considered in decisions impacting human capital. Information and the way we leverage can also be a source of disruption. Pasha Roberts of Talent Analytics examines a new view employee churn and how predictive analytics can be used to address high turnover roles. As mentioned previously, disruptions can come not only from new HR technology, but also from implementing new operational paradigms in the HR organization. Ben Peterson of BambooHR explores this by reimagining the role of HR. Joshua Reeves of Zen Payroll explains how the rise of an employee-centric workplace can impact the HR organization. In his article, Brian S. Sommer of TechVentive, Inc. explains that “The Problem is HR – Not HR Technology,” i.e., the relationship between the HR department and HR technology, and how new sets of skills are needed in HR to effectively leverage technology and add further value to the organization. HR technology is not only for HR organizations anymore – it is for all employees of an organization, and this is a key disruption in how new technologies should be designed and delivered. Cecile Leroux of Ultimate Software examines the key elements to keep this in mind when evaluating HR technology. Jill Goldstein of Accenture examines in her article, “The Digital Technology Demand Transforming HR,” how technology can be effectively leveraged by outsourcers and their customers. In our Executive Interview column we have the opportunity to ask JoAnne Kruse, CHRO of Amex Travel what are the disruptive trends in HR and how are they impacting the HR organization? In this issue, we also introduce a new column, Product Focus, that highlights a new product or feature in the HR marketplace. We profile Zao, a new social employee referral platform. In this issue’s Back Story titled “Why What You Did Yesterday Won’t Work Tomorrow,” Dr. Katherine Jones, Bersin by Deloitte, explains current trends HR needs to take into account now and those that are likely to impact HR in the future. I would like to thank Freddye Silverman, Silver Bullet Solutions and Michael Rudnick, Logical Design Solutions for their dedicated work on this issue. We hope it provides you with ideas on how you can positively disrupt your own HR organization and challenge the norm. www.ihrim.org • Workforce Solutions Review • January 2015

feature

Success Networks By Stephen Garcia, Philosophy IB and Greg Wallace, SYNAPP

etworks, not hierarchy, define business success today. People share ideas, make decisions, and solve problems through networks. Moreover, businesses either thrive in today’s climate of rapid change – or they succumb to it – based on the strength of their networks. Leaders and employees, however, lack visibility to networks. This network blindness limits their ability to target, measure and adjust corporate, team and individual development programs and social business initiatives for maximum impact. These new ways of working have a dramatic impact on the how companies operate, as well as on the people who work within them. For example, recent studies indicate that an employee’s network within their company affects not only whether they choose to stay or leave, but also their compensation, likelihood of being promoted, and the even the quality of their ideas. In other words, in a “wirearchy,”1 networks are the key mechanism at work. To be successful, HR leaders and practitioners must adapt their approach, methods, and systems to remain relevant. This article seeks to further HR professionals understanding of organizational networks and how they can be applied to maximize the return on human capital. The article begins with an overview of organizational networks and organizational network analysis (ONA). Next, it discusses three specific, high-value ways HR can improve its work by applying ONA.

Organizational Networks and ONA Let’s begin with an analogy. We’re all familiar with the materials graphite and diamond. In many ways, they could not be more different. Graphite is soft, opaque and dull; while diamond is hard, translucent and brilliant. What is fascinating is that both are made entirely of carbon. How could two materials that are so different be made from exactly the same element? The answer is connections. What differentiates graphite and diamond is not the carbon from which they are formed, but how those carbon atoms are connected. In graphite, carbon atoms are connected in loosely coupled

January 2015 • Workforce Solutions Review • www.ihrim.org

sheets that easily slough off. This is why graphite is often used as an industrial lubricant. In contrast, in a diamond, the carbon atoms are cross-connected every which way, and result in some of the strongest bonds in the universe. In short, connection matters. Organizations are comprised of connections too. In the case of organizations, the connections are relationships between individuals. These connections can take the form of problem-solving relationships, decision-making relationships, personal support relationships, and energy relationships to name a few. Since the Hawthorne studies in the 1920s and 1930s, we’ve known that social interactions affect organizational outcomes. It’s been relatively recently, however, that the power of these social interactions has become better understood. As it turns out, the pattern or structure of these relationships impacts not just individual performance, but also team and even organizational performance as a whole.2 What’s particularly interesting is the degree to which the network of social relationships that exists within an organization is often so different from what leaders might expect based on existing organizational charts, standard operating procedures or defined business processes. Figure 1 compares an organization’s formal structure to its informal organizational network. As can be seen from the organization’s formal structure in Figure 1, Stern is as a relatively low-level member of the team. In the organizational wirearchy, however, Stern plays a central role in facilitating communication across the three subgroups. Most leaders lack visibility to these informal organizational networks. As a result, they make decisions with incomplete information. According to Krackhardt and Hanson: “Many executives invest considerable resources in restructuring their companies, drawing and redrawing organizational charts only to be disappointed by the results. That’s because much of the real work of companies happens despite the formal organization. Often, what needs

attention is the informal organization, the networks that employees from across functions and divisions use to accomplish tasks fast, (1993, p. 111).” As organizations continue to evolve toward network forms, all functions will need to adopt a network perspective. This is particularly important for HR, which, in many ways, is the function most responsible for managing how employees interact with one another. Fortunately, new methods such as ONA can assist HR in this regard, and progressive HR leaders are reaping significant organizational benefits by applying network analysis-based solutions (see Case Study). Organizational network analysis is a method for mapping, visualizing, and analyzing the informal social networks that exist within organizations. It provides an x-ray of the organization, illuminating the way in which employees actually work and interact with one another. While ONA has been conducted for many years, it’s been only recently that increased computing power and easy-to-use software packages have made it readily available. Typically, ONA begins like any other organizational assessment with an identified business objective, such as a need to increase collaboration between departments or a desire to identify emerging leaders. The next step is defining the project scope, e.g., the North American division, the marketing function, the entire company, etc., and the relationships of interest, e.g., problem-solving relationships, decisionmaking relationships, energy relationships, personal support relationships, etc. With these decisions made, social network data can be collected. This data can be collected passively, e.g., by analyzing historical email traffic, or actively by asking employees, typically via a Web-based survey, who they communicate with most frequently about different topics. Once the ONA data is collected, software maps the network and analyzes its characteristics. The resulting network maps and analysis become the basis for findings and recommendations on improving organizational effectiveness. Human Resources’ focus on the interactions between people at work means that ONA is highly relevant to the work carried out by HR professionals. While the uses of ONA for HR professionals are very broad, we will describe three of the more common HR applications. These include: identifying emerging leaders, developing employees and retaining talent.

1. Identifying Emerging Leaders Bersin by Deloitte’s 2014 Global Human Capital Trends survey of human capital leaders reveals that, “Leadership remains the top human capital concern. The need is to develop new leaders faster, globalize leadership programs, and build deeper bench strength.” This need is not surprising to us. Traditionally, emerging leaders in an organization are identified top-down. Executives select those “up-andcomers” they believe are well-suited to lead the organization in the future. Often, HR assists in this process by providing historical performance data to aid executives in the identification process. No doubt executives have an important role to play in selecting emerging talent, but their perspective is sometimes skewed. Often, executives and senior leaders are several levels removed from the organization’s front lines and lack visibility to how the work is really getting done. In addition, they may be prone to only identify people similar to themselves, a common selection bias. In contrast to “rank and yank,” ONA employs a bottom-up approach. By asking employees who they turn to solve problems, make decisions, increase their energy, etc., a picture emerges of those associates who are most critical to the organization’s success. Often, the identification of at least half of these employees comes as a surprise to senior leaders. In a recent deployment of SYNAPP, a Web-based predictive people analytics solution based on organizational network analysis, with a 300-person department of a Fortune 500 technology company, we identified the 16 employees who carried the most weight with their peers – call them the top five percent movers and shakers. And out of these 16, a full 25 percent were at the lowest band in the company.

Figure 1. Informal Organizational Networks vs. Formal Structures.

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Dimensions

Description

Benefits

Creativity

Numerous connections to diverse others who have different points of view and can provide novel information

Better decision-making and improved innovation

Influence

Strong connections to a significant percentage of the larger organization

Ability to act as an organizational change agent

Execution

Strong connections to a significant percentage of the larger organization

Ability to act as an organizational change agent

Positivity

Numerous relationships that are focused not only on accomplishing work-related tasks, but also giving and receiving personal support

Motivation and encouragement in the face of adversity

Resiliency

Presence of leadership proxies with similar networks

Ability to delegate and not become overwhelmed and/or become a bottleneck

Table 1. Five Network Dimensions for Assessing Leaders’ Networks.

Figure 2. Retention Risks.

2. Developing Employees Twenty-first century leaders need more than an MBA. According to the Center for Creative Leadership, more than ever before leaders’ success depends on their ability to build and maintain strategic relationships. In response, new leadership competencies are gaining prominence. These competencies have names like: managing in a matrixed environment, leading without authority, breaking down silos, and collaborating across functions. Organizational network analysis can provide individual employees with an assessment of their personal networks. In particular, it can analyze how well a leader’s network supports 21st century leadership skills, such as creativity,

January 2015 • Workforce Solutions Review • www.ihrim.org

influence, execution, positivity and resiliency. Each of these dimensions contributes to leaders’ success in different ways (see Table 1).

3. Retaining Talent Unwanted staff turnover hurts, with the cost of replacing staff estimated at 150 percent of salary. Fortunately, ONA can provide an early warning system to identify at-risk employees so HR and line leaders can act before it is too late. Specifically, ONA can pinpoint employees who are likely to leave, either because they’ve become disengaged or because they are on the verge of burning out (see Figure 2). Organizational network analysis identifies disengaged employees by analyzing their relationship with their direct supervisor, their access to personal support at work, and the degree to which they are engaged in the larger network of problem-solving and decisionmaking. We’ve found that employees who do not enjoy a strong relationship with their boss, lack personal support, and are not plugged in to the larger network are much more likely to leave than their peers. In addition, those employees who everyone seeks to connect with can become overwhelmed. If the situation persists, they too can choose to leave. By analyzing the network, HR can see who may be at risk and then, if appropriate, take action. In a survey we conducted of human capital leaders, 40 percent believed that they would have been able to retain half of the people who left their companies if they had known in advance. Many HR applications beyond the ones discussed above exist for network analysis. For example, we’ve used ONA to increase collaboration between departments to identify succession candidates, to drive organizational change, and to design organizational structures (see Case Study).

Conclusion Organizational network analysis is a critical tool for HR leaders today. Whether your top priority is identifying emerging talent earlier, developing key 21st century leadership skills like collaboration and influence, or making sure your employees are engaged, insights from ONA will radically increase your visibility and help increase the impact of all your programs.

Case Study:

Westwood Professional Services Westwood Professional Services, Inc. (Westwood) is a multi-disciplined survey and engineering firm providing services for commercial and residential development, renewable energy, power delivery, and oil and gas projects. Established in 1972, Westwood serves clients across the nation from multiple U.S. offices. Westwood was recently recognized on the 2014 Zweig Letter Hot Firm List as one of the top 10 out of 100 fastest-growing architecture, engineering, planning, and environmental consulting firms in the United States and Canada.

Business Challenge Westwood’s vice president of HR, Kevin Larabee, is on point to ensure that the company’s human capital strategy keeps pace the firm’s blistering growth. Much of Kevin’s time is spent balancing the need to support the organic, informal relationships that underpin the firm’s renowned creative problem-solving with the need for enough formal structure to ensure efficiency. “We believe that if we put smart, creative people together in one room, great ideas happen, successful projects result, and we save our clients time and money,” Larabee says. “This doesn’t mean an absence of formal structure – rather, it implies “just enough structure” (JES) to ensure the right people are in the right room at the right time. Defining and implementing JES is what the firm counts on me to do.” A particular business unit that had grown extremely quickly turned to Kevin for guidance on refining its organizational structure. Right around this time, Kevin learned about ONA through the Human Capital Institute.

How ONA Helped Working in tight collaboration with Kevin, our team deployed a Web-based survey and generated insights on the structure of work connections within a unit at Westwood. The ONA reports defined the degree to which members of different sub-teams collaborate with one another and who colleagues turn to for energy and help solving problems. The team then worked with Kevin to overlay some proposed new org. charts on top of organizational network data to determine where connections between new managers and their reports were strong, weak or non-existent, creating a Network Informed Org. Chart (See Figure 3). This analysis clearly revealed where the existing work relationships support the proposed structure and where the lack of connections between peers and between subordinates and superiors could result in friction and inefficiency if unaddressed.

Results As Westwood continues to grow, the company looks to Kevin to make sure the organization is optimally aligned to continue delivering surveying and engineering solutions that bring their clients success. According to Kevin, “The insights and network informed org. charts helped us uncover some holes in our organization’s structural ability to optimally support upcoming, major project work. Thanks to this insight, we immediately undertook targeted teambuilding and org. design measures to strengthen our network.”

Figure 3. Network Informed Organizational Chart.

Endnotes 1 The term “wirearchy” was coined by Jon Husband and is defined as “a dynamic two-way flow of power and authority, based on knowledge, trust, credibility and a focus on results, enabled by interconnected people and technology.” More at: http://wirearchy.com. 2 The power of these relationships is explained by their ability to serve as conduits for the transfer of new ideas, knowledge, influence, energy and personal support. 3 The authors believe active collection produces more accurate data and, when cupled with network analysis insights for employees, promotes engagement far more than passive, which can erode trust. For more, see: http://www.seeyournetwork.com/dont-take-the-social-out-of-socialbusiness-analytics.

About the Authors Dr. Stephen Garcia is a partner at Philosophy IB, a management consulting firm that achieves meaningful and sustainable performance improvements by bringing clients’ innovative, bold strategies to life. He earned his MBA from the University of Virginia’s Darden School of Business and his Doctorate of Education from North Carolina State University, where his research focused on how organizational networks affect learning, change and innovation. He can be reached at stephen.garcia@philosophyib.com. Greg Wallace is Sales and Marketing director for SYNAPP, a Web-based predictive people analytics solution based on organizational network analysis. He has 20 years of experience in B2B technology marketing, primarily with ventured-backed startups, including SugarCRM, Inlet Technologies and NetBlender. He also serves as VP of Marketing with the OpenSocial Foundation. He earned an MBA and Master of International Affairs from Columbia University. He can be reached at greg.wallace@philosophyib.com.

www.ihrim.org • Workforce Solutions Review • January 2015

feature The CFO and CHRO Guide to Employee Attrition By Pasha Roberts, Talent Analytics

uch has been written about customer churn – predicting who, when, and why customers will stop buying, and how (or whether) to intervene. Employee churn is similar – we want to predict who, when, and why employees will terminate, in order to avoid attrition. In many ways, it is smarter to focus inward on employees. For one thing, it is far easier for a company to change the operations or even the behavior of an employee, than that of a customer. As will be seen, employee churn can be massively expensive, and incremental improvements will give big results. The most important difference between employee versus customer churn is that a business chooses to hire someone. So, predictive analytics can play a formative role in the employee mix. There is more at stake for both employer and employee. This person will literally be the face of your company, and collectively, employees produce everything your company does. Customers provide profit right away, so customer churn analytics tries to keep the train rolling a bit longer. We will see that employee churn analytics is more like trying to get the train to run long enough to provide any value at all. This article will walk through a proven, holistic framework for measuring the cost and attrition of employee churn. It enables the calculation of employee lifetime value and enables the use of advanced predictive analytics to solve the churn problem. Figure 1. Cost and Benefit for One Employee.

The Employee Value Curve Employee Cost and Benefit In this stylized example, we show the cost and benefit of an employee in dollars. It is simple enough to document the hard costs that make up the initial stages of employee life cycle: recruitment, training, and on-the-job learning. Once the employee is at full pro-

January 2015 • Workforce Solutions Review • www.ihrim.org

ductivity, costs are typically limited to salary, benefits and infrastructure. Hard, documented costs, such as the cost of training, are preferable over less defensible “soft” costs like morale. A multi-year view should include wage increases; beyond a few years it will be necessary to include inflation and the time value of money. Employee benefit, the amount that an individual contributes to revenue, can be reasonably estimated for sales or productive roles. For roles with a less direct connection to corporate gross revenue, value can be apportioned by geographic or departmental lines. Employees are generally not productive their first day – often it can take months to get up-to-speed. Different jobs will have different curves, but we show a typical s-shaped learning curve, followed by a gradual increase in benefit. In this hypothetical job, an employee takes a year and a half to ramp up to full productivity. Figure 1 shows a stylized cost/benefit plot for one employee across five years of tenure. At time zero, costs are high – an expensive recruitment process, administration, training, and supplies are all above the normal flow. We see that employees in this role start to provide daily value after nine months, when the benefit curve crosses costs. This is called the “daily breakeven.” The cost and benefit curves cross into a “quantitative scissors” – the left “red zone” is an inescapable reality of doing business. To decrease the overall costs due to employee churn, something has to budge on these curves.

Cumulative Employee Value We sum these costs in Figure 2, showing a cumulative value in the familiar “hockey stick” shape. The plot shows the total net cost or benefit accrued by an employee if they get to a specific tenure. This curve, the employee value at time “t” is a valuable business object. Once the “debt” from training and startup is paid off, the line crosses zero. This is called the “cumulative breakeven.” The red region shows that terminations before

this point are a cost to the business. In this stylized example, the employee starts providing daily value after nine months, and does not pay back the startup “debt” until after 24 months. An employee who leaves at nine months represents a net cost of over US$25,000 in lost startup costs. By comparison, in our engagements we often see impressive attrition after just three to six months. Normally, we rely on aggregated figures to calculate an average curve and breakeven for each role. Advanced analytics can use transactional sales or production figures to calculate individual curves and breakeven for each employee. There is a sub-field of accounting called Human Resource Accounting (HRA) that delves more deeply into this subject, rightly treating employees as assets instead of costs. When scaled to the entire enterprise, HRA can be complex. For a single role, we need not dig as deep – simple heuristics can build the curves defined in Figure 1.

Figure 2. Cumulative Employee Value.

Figure 3. Histogram of Attrition.

Attrition: the Employee Survival Curve With a cost curve in hand, we now turn to evaluate attrition. We hope to illustrate a far more intuitive and useful visualization than the popular business metric, annual attrition.

The Attrition Histogram The histogram is a useful first glance of how attrition plays out in an organization. It is easy to produce from simple HR records, and the graphic already tells a deeper story than simple averages or turnover rates. Figure 3 shows a basic histogram of tenure. The horizontal “X” axis maps out the number of years tenure in a specific role. The vertical “Y” axis shows the count of how many employees had that amount of tenure. We can see a stack of early departures in the first nine months, then another rise later.

Figure 4. Hazard Curves - Daily Probability of Termination.

The Hazard Curve But, this is deceptive. Histograms are messy, and don’t show cumulative effects. Figure 5. In Figure 4, we have two hypoSurvival Curves – Probability of Reaching Tenure. thetical regions: Chicago is blue, with longer tenure. New York is brown, with high turnover in the first year. This is just an example – the real world has more nuance and ambiguity. This same analysis can apply with one, two, or many groups of employees. Likewise, the model works for continuous variables like employee engagement. Good machine learning algorithms can identify useful clusters.

The Survival Curve Employee attrition falls into the same class of “survival” problem as machine failure rates or medical research. This domain has brought us solid statistical innovations, including visualizations known as the “hazard curve” and the “survival curve.” The “bumps” in Figure 4 are, in fact, “hazard curves” – the hazard of someone terminating at time “t.” The survival plots in Figure 5 use the same data as the hazard plots, but put it all together into one holistic sum. Across the horizontal ‘X’ axis we see tenure, from zero to many years. On the vertical ‘Y’ axis, we see the probability of an employee surviving to that tenure. In fact, some people don’t show up to their first day of work – but on day one, survival is near 100%. The normally reported annual attrition is here – at the one-year mark, we see 86% survival for the Chicago curve, which subtracts from the top for 14% annual attrition. Likewise, the New York curve shows 58% survival at one year, which subtracts to 42% annual attrition. www.ihrim.org • Workforce Solutions Review • January 2015

But, one year is somewhat arbitrary. Remember that our breakeven point is two years - arguably this is a more useful threshold. At this 24-month breakeven point, we see 65% remaining from Chicago, but only 21% from New York. Please note that there are special techniques, notably the KaplanMeier Estimator, that must be performed to properly account for Figure 6. current, unterminated employees. Comparison of Employee Lifetime Value. These methods are built into modern statistical software, and can even be done in Excel.

Employee Value + Survival = Two Fundamental Curves We believe that survival curves, along with the value curves developed above, are two vital tools that should be produced by every HR or Finance department for every significant role. They capture the essence of the role’s impact on the company, and are the basis of powerful calculations.

Lifetime Value of an Employee One important application of these curves is to obtain the lifetime value of an employee. Many have worked out the lifetime value of a customer to five decimal points, but few have ever considered the lifetime value of an employee. We can look up the cumulative value at an arbitrary date, say five years. The chart shows that an employee at that tenure is About the Author worth US$78,851. However, not As chief scientist and co-founder, Pasha all employees last five years – only Roberts is responsible for architecture, 18% from Chicago and 0.2% from development, and algorithms for Talent Analytics. He wrote the first implemenNew York. tation of the software more than a Borrowing a technique from decade ago, and continues to drive new features and Finance, we risk-weight the cost platforms for the company. He has decades of curve to give our answer. We have experience/education that span computing, quantitative, a probability at each tenure point artistic and business categories. Roberts holds a in Figure 4, and a dollar value at bachelor’s degree in Economics and Russian Studies each tenure point in Figure 2. We from The College of William and Mary and a M.S. degree in Financial Engineering from the MIT Sloan multiply each hazard curve value School of Management. His thesis at MIT prototyped the with its matching cost curve value, application of advanced 3D graphics to massive then sum the results. This dotfinancial “tick” datasets. He founded WebLine product gives us a proper riskCommunications Corporation, a Web-call center weighted lifetime value. enterprise software company, and Lineplot Productions, In this sample, a Chicago ema financial visualization/animation service company. His ployee’s lifetime value is $31,487, passion is to develop new analytics to focus business performance, and to extend the Talent Analytics model while the New Yorker is a loss to a useful set of software platforms. With every new with - $9,343. A far cry from the project, he hopes to discover new information about potential $78,851. These groups people and the work they do. Follow him on twitter @PashaRoberts.

January 2015 • Workforce Solutions Review • www.ihrim.org

have the same cost curve, but different survival curves, which makes a huge difference.

Scenario Planning Employment, and business in general, is not a laboratory environment. We don’t get do-overs for failed scenarios, and our ability to “try things out” is limited. Customer analytics is slightly more amenable to A/B testing, just because the relationship is thinner, and there are many customers. With this model of lifetime value, we can simulate the impact of programs. What happens if we: • Increase wages by X%, and assume it will shift survival curves up by Y%? • Reduce wages by X%, and assume it will shift survival curves down by Y%? • Spend X dollars more on training, and assume it will accelerate learning by Y%? • Spend X dollars more on coaching, and assume it will help New Yorkers stay Y% longer? • Hire X% more employees in Chicago?

Predictive Analytics Baseline Sensitivity analysis of these scenarios will quickly reveal that better employee selection is the key to higher lifetime value. All of the other measures (except reducing salary, which is often impractical) have lesser effects. In predictive hiring, we look for signals that reliably show a candidate is more likely to stay longer in the role. The result of a good model is better employees and a higher average lifetime value.

Conclusion Human Resources is known for having inward-facing metrics, like cost-per-hire or time-to-fill. The metrics that we have introduced here – employee value, survival and employee lifetime value – go beyond HR to serve enterprise goals. They are key indicators of how employees – the people that HR hired – are lasting and performing. Performance is the true employee metric that business cares about. These metrics are especially valuable for highvolume, high-turnover roles that need attention. They are the measuring stick for improvements to hiring selection, engagement efforts and performance improvements. Is it time for your organization to begin using a predictive analytics approach to your highvolume, high-turnover roles?

feature Reimagining the Role of HR By Ben Peterson, BambooHR

verywhere we look, the traditional role of HR is being challenged. Human Resources managers of the past had a main responsibility: employee management. And, along with this responsibility came a lot of tedious, manual processes and answering endless questions. Almost 70 percent1 of HR managers reported that employee management is the biggest threat to their productivity. While they understand it is a necessary part of their job, many HR professionals feel like they should be spending their time participating in higher-level activities that deliver more strategic value to the organization. Human Resources does not need to be tracking employee management processes like time off, onboarding, benefits eligibility, or anything else via manual, time-consuming processes. There are smarter ways to do employee management and bigger issues that HR can tackle for greater impact and productivity. Frankly, we think HR professionals are too important and valuable to be spending time on tedious processes. They are taking on bigger workplace matters, and technology is a key enabler helping them take on more meaningful, impactful work. While software facilitates this evolution, HR professionals find it also necessary to reimagine their roles. Naomi Bloom said it well in her article, “Is SHRM Listening?” stating that, “Great software is only an enabler. Great human resource management needs much more than great software.”2 Human resource management also needs talented people with a diverse skills cache. By using technology to create efficiencies and free up time, HR management is challenged to determine which skills to develop for themselves and their people to efficiently help their organizations succeed. There are six areas where HR professionals can focus to make a greater impact and potentially begin disrupting the current HR paradigm within their company.

Professional Development Your employees want people development, career development, professional development – whatever you call it, your employees need and want opportunities for growth, learning and advancement. And, they want your help with it. When asked if the responsibility of professional development belonged to a manager or an employee, 81 percent of respondents3 said that it was shared. Some HR professionals already understand this, because 60 percent of them1 said they should “Great human be spending more time on professional resource development. Therefore, take a vested interest in your employees’ careers management needs through training and other professional much more than development opportunities. Transparency and accountability are key great software.” characteristics of a great development program, and with the right technology employees are empowered to manage their own development. A key result of enhancing employee skills is being able to hire from within. It’s much easier and less costly to fill any position with current, knowledgeable employees. Byproducts of having a strong internal career program are employee morale, retention, engagement and more effective recruiting. Also, don’t forget about developing your own skills. All the areas we discuss here will be greatly enhanced by investing time and effort in your own professional development. Please learn and grow and never be satisfied with the status quo. None of us can keep doing what we’re doing and expect different results.

Company Culture Human Resources is the gatekeeper in a company. As such, monitoring and maintaining company culture is becoming a primary responsibility. In fact, some companies are even incorporating culture management into the titles of HR professionals. In 2006, Google added the

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title Chief Culture Officer to the head of HR’s job description. And, culture maintenance and management is no small duty. Eighty-eight percent of employees feel that a distinct company culture is vital to business success.4 However, only 17 percent of companies view their brand as compelling and engaging.5 Having a company culture will . . . 84 percent not contribute to success if it is of employees say not a good one. Make sure you give it some deliberate thought. they are happy at If you do not define and defend work when there culture, it will define itself – and is a clearly defined you may not like the outcome. Unfortunately, 68 percent of company culture. employees feel that their company isn’t doing enough to create a positive culture at work.6 Here are some ideas to help you establish your company’s culture or defend it if you already have one: •D raft a company culture document. Document and deliberately outline behaviors that are in and out of line with that culture. Then, recognize when an employee does something that maps to it and swiftly correct behavior that does not. •P ublish your culture. What good is a company culture if no one knows what it is? At BambooHR, we have a brand book that outlines our company values. Create something that makes sense for your company. Have your new employees read about your values. Review them at company meetings. Make values into wall art! Make sure that it becomes an integral part of your employees’ workplace interactions. •H ire people who are a culture fit. When new hires fail, 89 percent of the time it is due to a lack of culture fit.7 We’re all familiar with the expression “A few bad apples can ruin the whole bunch.” Don’t risk your culture by hiring a bad apple. Do yourself a favor and start hiring people that map to your culture. Human Resources leaders need to be paying close attention to and nurturing company culture. Make sure the whole company is aligned with it, because 84 percent of employees say they are happy at work when there is a clearly defined company culture.4 And, that will also probably help you succeed in other key business areas.

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Employee Engagement and Happy Employees Being a people-pleaser isn’t typically thought of positively. But, considering that happy employees have a 31 percent increase in productivity, three times the creativity, and increase overall sales by 37 percent,6 it seems like being a people-pleaser could also be pleasing to your company’s bottom line. Human Resources professionals are charged with a company’s most valuable asset: their people. Just like the managers of other company assets, HR professionals have a responsibility to invest in this asset wisely. Taking an interest in employee happiness pays large dividends – happy employees are 55 percent more effective in their efforts and 85 percent more efficient with their time.8 And, making your employees happy can positively influence traditional HR areas like recruiting and time off. Making your employees happy decreases their sick days from an average of 10.7 days per year to 3.9 days per year.9 You may even be able to spend less time (and money) on recruiting if you spend a little more time making sure your employees are happy because they stay twice as long at their jobs.8 Happy employees will also help you in acquiring the right talent. They are 186 percent10 more likely to positively promote their company; that is not just good for nabbing the best talent, it also secures potential customers. Do you know what makes your employees happy? Find out. Ask them. Do you think it is not your job? It is now!

Tech Fluency Human Resources professionals use many types of technology every day – and they are smart to do so. Technologically advanced small to medium-sized businesses increased their annual revenues 15 percentage points faster than those who were not as quick to adopt technology.11 Human Resources professionals need to be involved in the selection of software and technology. They should be able to show how it will make their functions easier. After all, this is their area of expertise! And they need to be able to make an educated decision because getting new technology – especially software – is a pretty big commitment. Do you know which software tools are most important for your company? Fifty-six percent of companies prefer software that best fits their most important needs (best-of-breed) and then use integrations to connect with other applications that meet their secondary needs.12 If you are focusing on finding the best software to

meet the most important needs of your company, then you are ensuring coverage of the right areas. And, after applications are selected, it is important for HR professionals to have a decent understanding of how to use them. Human Resources should take some time to become educated and familiar with their software. The best HR software companies invest in providing excellent training and support. Take full advantage of those resources. Social media is another type of technology that HR professionals should be familiar with and using regularly. Ninety-eight percent of HR professionals believe that social media is an important tool for recruiting, retaining and managing employees. Also, 90 percent of HR professionals believe that social media should be used as an HR tool. It is pretty clear that social media is now mainstream when it comes to HR careers – which isn’t surprising considering all of the advantages social media provides. Take LinkedIn, for example. There are obvious recruiting advantages to HR departments who use LinkedIn when looking for new hires. A Jobvite recruiting survey found that 81 percent of college seniors use LinkedIn as a professional and networking tool, and almost half use it to research employers.13 But recruiting isn’t the only reason HR professionals should be using LinkedIn. There are many interest groups where people share valuable information, discuss relevant and current topics, and ask each other relevant questions. It is a great way to learn from other HR leaders’ experiences and get help easily when needed. LinkedIn also offers articles from thought leaders with valuable information. Remember that professional development you need? Be a little selfish and spend a little time on LinkedIn developing your own career.

solution. Laura Farrow is a lawyer who practices mediation and teaches HR professionals to mediate. She wrote, “Mediated resolutions work better and last longer than authoritatively imposed resolutions because everyone involved buys into them. Moreover, meBe a little selfish diation fosters mutual respect through and spend a little improved communication. Mediation can mend and preserve frayed working time on LinkedIn relationships, even when the parties are developing your extremely angry.”15 When a mediation process is estabown career. lished for effectively handling conflict and employees do not have to let annoyances or issues fester, employees can focus and work more easily with each other. Learn how to informally mediate your employees will be empowered, your workplace will be more effective, and you will be able to nip problems in the bud before they explode into workplace war.

Workplace Mediation

Empower your position by understanding how to use the data you have. Doing so will make your company more successful. Instead of letting data collect dust in a filing cabinet or get lost in some spreadsheet Empower your in a long forgotten folder, put it to use! position by Do you track information that you get in exit interviews about what people understanding how liked and disliked while they were at to use the data you your company? Do you have salary history readily accessible for each of your have. employees? Are you measuring and predicting the success of your incentive programs? If you aren’t, you are not alone. Only 44 percent of HR professionals base business decisions on objective talent performance data.17 Get training on how to use your data and

Human Resources professionals find themselves in some pretty uncomfortable situations. Whether it is a rage email, an office shouting match, or a passive-aggressive employee conflict, most HR managers have some pretty crazy stories to tell. However, when handled correctly, disagreements can result in innovative outcomes. Mediation is becoming a popular workplace skill. This isn’t surprising considering that 82 percent of managers who have used mediation to resolve workplace conflict said it resolved the issues either completely or partially.14 Mediation is a process where the goal is a win-win situation achieved by guiding opposing parties through brainstorming and selecting a

Data and Analytics Earlier, HR professionals were referred to as gatekeepers of culture. They are also the gatekeepers of data. No one has access to more information about employees than HR. Tom Calvard, lecturer in human resource management at the University of Edinburgh Business School, wrote: “Certainly, something is at stake politically and professionally for HR. KPMG itself has argued in 2013 that ‘people are the real numbers,’ and that ‘workforce analytics’ is the key for HR to move away from offering unconvincing generic models and towards more insightfully tailored solutions that carry employee value (and HR practitioners) further into the boardroom, alongside Finance and other executive functions.”16

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find a system that allows you to access it easily. Some HR Ben Peterson is the co-founder and CEO software – ours included – has of BambooHR (www.bamboohr.com), the the ability to run data reports leading online HR software for small and directly in the system. For medium-sized businesses that have instance, you can chart out exoutgrown using spreadsheets to manage their employee information. Clients include industry actly how much your company leaders such as Pinterest, Disqus, Fab, FreshBooks and has grown (and even how much Fitbit. He can be reached at each department has grown) ben@bambooHR.com. in employee size since day one using our standard head count report. This could be pretty valuable to illustrate company growth and predict a future rate of growth. Imagine the possibilities of squeezing the reporting capabilities out of each piece of data you have and analyzing it to make business decisions. As back-office technology and the modern workplace continue to evolve, the once traditional view of HR will adapt alongside them, continuing to usher in a new era in HR. Adapting is a process. Just as the role of HR will not change overnight, no one is expecting HR professionals to come back tomorrow with a new set of expertise. However, HR professionals have to stop doing things the way they always have, disrupt the status quo, and start looking at HR in a new way. Software is enabling thousands of companies to work smarter and helping HR to focus on more impactful things – like developing employees, managing company culture and analyzing data. Regardless of company size, the right technology helps you work smarter and enables innovation.

About the Author

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Endnotes 1 Jeana Quigley, “Employee Management Study,” BambooHR, Nov 18, 2014, http://www.bamboohr.com/blog/hr-time-challengesinfographic 2 Naomi Bloom, “Is SHRM Listening?” In Full Bloom, Nov 10, 2010, http://infullbloom.us/1646/is-shrm-listening/>. 3 Hilary Wright, “[Infographic] Employee Engagement: What Career Growth Opportunities Do Employees Want?” Quantum Workplace, Oct 10, 2013, http://www.quantumworkplace.com/infographic-employeeengagement-career-growth-opportunities-employee-development-planning/. 4 “Core Beliefs and Culture,” Deloitte, Oct. 2014, http://www. deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/ Documents/us_leadership_chairman_survey_071114.pdf. 5 Josh Bersin, “Why Companies Fail To Engage Today’s Workforce: The Overwhelmed Employee,” Forbes, March 15, 2014, http://www.forbes.com/sites/joshbersin/2014/03/15/whycompanies-fail-to-engage-todays-workforce-the-overwhelmedemployee/>. 6 “Setting Up Success with Company Culture,” Visa, Oct 29 2014, <http://ccpcdn.visify.netdna-cdn.com/wp-content/ uploads/2013/08/Visa-Corporate-Culture-Infographic.jpg>. 7 “How To Create An Inspiring Company Culture [Infographic],” Pinterest, October 2014, http://www.pinterest.com/pin/82261130668728599/ 8 “Why Your Boss Should Really Be Making You Happy Right Now,” Pinterest, http://www.pinterest.com/pin/82261130668728939/. 9 “Happiness at Work,” Ayutopia, http://ayutopia.com/happiness-work/ 10 “Happiness in the Workplace [Infographic],” Lireo Designs, Aug 12, 2014, Web. 29, http://www.lireo.com/happiness-in-theworkplace-infographic/ 11 “Ahead of the Curve,” Microsoft, https://www.microsoft.com/global/en-us/news/publishingimages/ImageGallery/Images/Infographics/10-04SMBCloudUsers_web.jpg 12 “Human Resources Software BuyerView, 2014,” Software Advice, April 22, 2014, http://www.softwareadvice.com/hr/ buyerview/report-2014/ 13 “Social Knows: Employee Engagement Statistics,” The Social Workplace, November 17, 2011, http://www.thesocialworkplace.com/2011/11/social-knowsemployeeengagement-statistics-fall-2011-ed/ 14 “ Mediation: An Approach to Resolving Workplace Issues,” ACAS. org, Feb 2013, http://www.acas.org.uk/media/pdf/2/q/Mediation-an-approach-to-resolving-workplace-issues.pdf 15 Laura Farrow, “Mediation of Workplace Tiffs Is The Way Of The Future,” Dispute Resolution Specialists, http://www.mediates.com/drs-tiffs.html 16 Tom Calvard, “Analysing analytics: what does big data mean for HR?” H.R. Zone, January 29, 2014, http://www.hrzone.com/feature/technology/analysing-analyticswhat-does-big-data-mean-hr/142802>. 17 Sarah Fallaw and Tracy Kantrowitz, “2013 Global Assessment Trends Report.” The CEB Talent Measurement Solution, p. 12, http://ceb.shl.com/assets/GATR_2013_US.pdf.

feature The Rise of the EmployeeCentric Workplace

he balance between employers and employees is shifting. A few generations ago, employees could work at a single company their entire lives and retire. That is not the case anymore. According to a LinkedIn study,1 up to 85 percent of the workforce is actively looking or open to a career change, including employees satisfied at their current job. What has prompted this shift? One factor is job security. In light of the recent economic downturn, more and more employees recognize that their jobs are unstable. According to a study by the Society of Human Resource Management,2 59 percent of entrylevel workers were concerned or very concerned about job security. For mid-level candidates, that number drops to a still-worrisome 50 percent. Of course, as the economy is starting to recover, employee sentiments have already begun to shift from job security towards job mobility. Job mobility isn’t just the byproduct of an improving hiring market. A recent study by Wharton Business School3 found that external hires get paid 18-20 percent more than internal promotes, even if they underperform their internal hire counterparts. In addition, external hires are also more likely to get promoted faster. Comparatively, the average raise is only three percent annually according to HR consulting firm, Towers Watson.4 This means workers who switch jobs may potentially earn 15-17 percent more than if they were promoted internally. As a consequence, employers are now finding retention to be a bigger issue. The dual factors of job security and job mobility have created a new paradigm for modern employees and they have adapted. In the same SHRM study, 58 percent of employees found their abilities and skills gave them job security, while 34 percent cited length of service as the source of their job security. In other words, employees are now relying on their skillset, and not tenure, to stay in their role. Modern employees know they have to consistently update their skillset to retain their current job or get promoted. This is especially true if the employee is looking to switch jobs. With more information online, the modern employee also has a better understanding of his or her value to the organization.

By Joshua Reeves, ZenPayroll In short, the modern employee is now more independent, better at self-starting, and potentially more productive. The linchpin in the paradigm shift of the employee-centric workplace is technology. Technology has democratized previously closed silos of employee information, from things like company culture, compensation and employee perks. At the same time, companies are also recognizing this shift and opening up their internal systems. Through modern software, employees are increasingly gaining more control of their career. Employers are also encouraging new communication channels, so that direct reports can give their managers feedback. With so many changes in the employee-centric workplace, it has become more challenging for employers to engage their employees. That’s why it’s important to take a modern view on how your company recruits, empowers, and ultimately shows appreciation to its workforce.

How Recruiting Has Changed The way we recruit has changed dramatically in the past 11 years. It was May 2003 when the professional social network LinkedIn launched publicly. LinkedIn was not the first social network to put our occupation front and center. What it did, however, was encourage a new class of passive candidates to post their résumé online. Now, everyone’s career could easily be queried based on experience, skill, education or location. Before LinkedIn, the primary option for online job seekers was sites like Monster.com. There, job seekers could proactively peruse job listings. Because of the mismatch between the much higher number of job seekers and limited openings, recruiters would have to filter through thousands of inbound applicants. The balance between employer and employee heavily favored the employers, as they were the gatekeepers of job postings. This relationship did not work well for the recruiters either. Unfortunately, many (if not most) candidates who applied were not qualified for these positions. Rather, it was often the candidates who were already employed elsewhere that www.ihrim.org • Workforce Solutions Review • January 2015

were the most qualified. Unfortunately, before LinkedIn these candidates could not be easily or cost-effectively uncovered without hiring expensive headhunting services. After LinkedIn, recruiters now had access to a previously untapped pool of satisfied, employed, and non-actively job-seeking candidates. Considering the effective unemployment rate in the United States averages to approximately 14 percent, this means recruiters now have access to the other 86 percent or seven times more candidates! The opening up of the employee marketplace through LinkedIn was one of the crucial first steps towards employee empowerment. Soon after, more and more online services emerged that further shifted power to the employee. Glassdoor, for example, publishes a crowdsourced database of important company information such as compensation, benefits, culture and executive leadership. Employees no longer had to rely on inconsistent word-ofmouth or guesswork when researching their potential employers. By making this information transparent, companies who fared poorly in the Glassdoor surveys would have to improve, or risk losing out on qualified candidates. More recently, we are starting to see the inverse marketplace emerge in highly competitive fields like software development. Silicon Valleybased company Hired, for example, has created a two-sided marketplace for talented engineers, designers, and product managers. On About the Author the Hired platform, an engineer can Joshua Reeves is CEO and post her credentials online and have co-founder of ZenPayroll. He companies actually bid for her services. believes in the power of In October 2012, 153 engineers resoftware to solve complex ceived a total of US$78 million in offers problems and founded from the auction.5 Hired is definitely a ZenPayroll to deliver delightful, modern payroll to businesses everywhere. Prior to co-founding more extreme example of the evolution ZenPayroll, he was the CEO and co-founder of of recruiting in the employee-centric Unwrap, a SaaS startup which was acquired in workplace. Nevertheless, it is stark 2010. In 2012, he was selected to the Forbes 30 reminder that an employee who underUnder 30 list. He is also a regular contributor to stands her value in the workplace is far the Wall Street Journal, Forbes, Entrepreneur, Inc. more valuable. and Business Insider. You can follow him on With more information online, emTwitter. ployers have to compete in all aspects to differentiate themselves. This is especially true when your company is not competitive on compensation. Within the technology ecosystem, companies like Google, Facebook, and Apple typically pay the highest in total compensation. This means the vast majority of small and medium-sized businesses must compete in other ways. Fortunately, studies have shown that compensation is only one factor for a new hire. In a separate study,6 SHRM found that, following compensation, “opportunities to use one’s skills,” “supervisor relationships,” and benefits were also rated “very important” for employee

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job satisfaction. This means if there is an 800-pound incumbent in your industry, you still have a chance to competitively recruit. It is just as important that you do it in an authentic and unique manner. At ZenPayroll, for example, company culture is one of our most important hiring differentiators. One of the key pillars in ZenPayroll’s culture is the redefining of the employer-employee relationship. Critical to this concept is something we call ownership mentality. This means that every employee is a literal and figurative owner in the company. With this ownership comes the responsibility of acting as a steward of our values and an advocate for our customers. Employees are trusted to make decisions around schedule, work style, etc., because they are self-motivated, and care deeply about the company’s mission. This is one part of how we empower our employees, and by extension, how we are able to maintain employee retention.

Why You Must Empower the Modern Employee As the workplace becomes more employeecentric, management becomes less top-down and more bottom-up. This manifests itself best in employee empowerment, which is just one part of the larger trend towards the more independent modern employee. As your employees have more job mobility, it’s important to also grant them independence at work so they feel empowered and, therefore, more engaged. Technology is a major component of employee empowerment, particularly with the tools used in the workplace. More and more cloud-based solutions exist for teams or job functions, which means procurement can now be decentralized. By allowing employees to choose their own tools, you can create an environment that encourages an ownership mentality that sets them up for success. Many cloud-based tools can be used “out-of-the-box” without major installations so there is also no need to involve a lengthy technical audit. Furthermore, since most Software-as a Service (SaaS) products can be purchased with a company credit card, employees also do not need to go through a lengthy procurement process. Even for some companies with more complex needs, many cloud-based business-to-business (B2B) vendors have extensible application programming interfaces (APIs), which means their solution may fit easily into the software tools already being used. Another way technology encourages employee empowerment is through teleconferencing. Stalwarts like Cisco or newer companies like Blue Jeans allow employees to work from home or

remotely. There are some key benefits to remote work. Many companies prefer a distributed workforce because they want to be closer to their customers or it’s more cost-effective. From the employee’s point of view, working from home allows many professionals to have more flexible schedules. This is especially helpful for parents, which, in turn, can increase retention from that demographic. An important ancillary benefit to the empowered employee is accountability. As your employees embrace an ownership mentality and begin to take responsibility for different aspects of the business, they will also start becoming accountable to one another. But, empowerment is only the beginning of engaging the modern employee. As the balance of power in the modern business continues to shift towards the employee, employers must also consider if they’re appreciating and rewarding their employees for their hard work.

The Importance of Employee Appreciation Perhaps one of the most prevalent changes in the employee-centric workplace is the emergence of company incentives. Google may have been the most famous with its sleeping pods and cafeteria-style eateries, but many companies offer perks today as part of employee appreciation. What do we mean by employee appreciation? First, let’s highlight that traditional incentives are no longer as effective for the modern employee. A recent study by HRIS provider BambooHR found that compensation was the third most important incentive for employees, behind career advancement and work-life balance.7 Instead, modern employees are looking closely at the other aspects of work to help them make career decisions. A study by InteliSpend found that 66 percent of employees base their decision to stay at a company partially on the incentive programs offered.8 Considering that it may cost 1.5 to 2 times more to replace an employee, there’s a clear financial motivation for the company to focus on retention.9 Eighty-six percent of companies already have some type of incentives or rewards program in place, and this practice isn’t only great for your current employees. In the same study, BambooHR found that 42 percent of potential recruits consider a company’s recognition programs when seeking employment. Corporate incentives aren’t just free food or foosball tables, however. The most critical component of a good perks program is publicly recognizing an employee’s good work and making it personal. There’s a famous story about the

late Pat McGovern, CEO and founder of IDG, the company that publishes PC World. Pat used to fly around the world and personally hand cash bonuses to every employee he could find that was doing a great job. That is weeks of travel and thousands of employees across multiple countries. People enjoyed the cash bonus, but they really appreciated his personal touch. When he handed you the bonus, Pat would talk about what work you did and ask for feedback. This was extraordinary for an organization as large as IDG. At ZenPayroll, we give company-wide kudos. Every two weeks, we have an allhands meeting that we call the “State of Z.” At the beginning of the meeting, we open up the floor for anyone in the company to give kudos to any employee who has gone above and beyond the call of duty and truly embodied the ZenPayroll values. This kudos session has been very impactful, and it has a number of positive effects: • It empowers the employees to recognize each other for their hard work. It is important that managers recognize the contributions of their direct reports, but it can be very meaningful when your peers do it as well. • It helps different parts of the company understand what everyone is working on. Some of your employees work in different departments or on different shifts. If you give company-wide kudos, you open up communication channels between different groups.

Endnotes 1 Matt Grunewald, “Why More Employees Are Considering Leaving Their Companies [INFOGRAPHIC],” http://talent.linkedin.com/blog/index. php/2014/03/internal-mobility-exit-survey, March 18, 2014. 2 SHRM, “HR Jobs Pulse Survey Report,” January, 2014. 3 “Why External Hires Get Paid More, and Perform Worse, than Internal Staff,” http:// knowledge.wharton.upenn.edu/article/whyexternal-hires-get-paid-more-and-performworse-than-internal-staff/, May 28, 2012. 4 Gary Strauss, “Pay raises in 2014 expected to average 3%,” http://www.usatoday.com/ story/money/personalfinance/2013/09/18/ how-much-of-a-pay-raise-can-youexpect-in-2014/2832791/, September 18, 2013. 5 J.J. Colao, “Hounded By Recruiters, Coders Put Themselves Up For Auction,” http:// www.forbes.com/sites/jjcolao/2012/10/15/ hounded-by-recruiters-coders-put-themselves-up-for-auction/, October 15, 2012. 6 SHRM, “Employee Job Satisfaction and Engagement,” May 2014. 7 BambooHR, “5 Tips to Make Incentives Meaningful and Retain Employees,” September, 2014. 8 InteliSpend study, “23 Employee Motivation Statistics to Silence Naysayers” - See more at: http://intelispend.com/blog/23employee-motivation-statistics-to-silencenaysayers/#sthash.80rBwj4w.dpuf 9 Josh Bersin, “Employee Retention Now

Software can also enable this appreciaa Big Issue: Why the Tide has Turned,” tion. Performance management software https://www.linkedin.com/pulse/ article/20130816200159-131079-employlike 15Five or iDoneThis keeps the entire ee-retention-now-a-big-issue-why-theteam accountable for their work. More tide-has-turned, August 16, 2013. importantly, it also gives employees a transparent platform to see how they’re doing and where they can find improvement. By recognizing good work in a consistent, structured manner, your employees will have a better outlook on career advancement.

Why an Employee-centric Workplace is good for the Employer

The movement toward an employee-centric workplace is a good thing for employees and for business. With empowered employees who feel appreciated, you now have teammates who are as driven to help the company succeed as you are. The balance of power in the workplace is leveling, and it is great for all.

www.ihrim.org • Workforce Solutions Review • January 2015

feature The Problem is HR – Not HR Technology By Brian S. Sommer, TechVentive, Inc.

Human Resources leadership hasn’t changed in seven years – but the technology did.

The composition of the HR leadership in many firms remains mostly unchanged since before the great recession of 2008. Human Resources groups were savaged during the recession. Head count was whacked hard as businesses needed smaller HR groups to handle the reduced size of their recession-oriented workforces. Unfortunately, as the recession fades away and businesses have been rehiring, expanding and rediscovering their pre-recession chops, HR departments are still starved for funding, head count and relevant HR technology. It’s like the business is coming out of the recession, but HR is still stuck in 2008. The post-recession HR organization is more often than not comprised of survivors who possess pre-recession skills and use pre-recession tools. It’s as if HR has entered the Twilight Zone of irrelevancy.

Get-Out-of-Jail

MAPAW

Sex, Drugs and Rock & Roll

HR Databases

HR & Other Corporate Databases

HR Business & External/ Big Data

Get-Out-of-Jail Analytics

Table1. Three Kinds of HR Analytics

It’s only logical that people, like HR people, are going to buy the technologies that they understand. Today’s HR technology buyers are clearly interested in Payroll, HRMS and other familiar

Business Value

Tactical

MIdding

Strategic

Cool Factor

Low

Medium

Huge

Willingness to Buy

High

Moderate

Low

New HR Skills Required

Few

Some

Plenty!

Example Analytic App

ACA Compliance

Retention Risk

Recruiting Brand Management

Who Implements

Software Vendor

Unknown

Case Study: The Three Kinds of Analytics

I would opine that there are three kinds of HR analytic solutions in the market today with each one appealing to a different kind of buyer. Unfortunately, there are many buyers for the basic solution and virtually no one for the really cool solutions. Briefly, these HR analytic solutions are: • Get-Out-of-Jail Analytics (GOJA); • Motherhood, Apple Pie, and the American Way (MAPAW) solutions, with apologies to non-U.S. readers; and, • Sex, Drugs and Rock & Roll (SDRR) analytics.

Human Resources professionals only buy HR technology that they understand.

Data Sources

applications. They understand these functions. Sure, some of the newest variants of these have radically improved user experience (UX)/mobile front-ends but they simply extend familiar applications and processes. Radical change is certainly scarier and more risky. It’s why Geoffrey Moore penned his classic book Crossing the Chasm all those years ago. It takes an innovator or early adopter to be one of the first buyers of a new technology. But many of the “new” technologies HR people should be buying aren’t really that new anymore. Case in point: Analytics. No, something else is afoot here. And, the answer may lie in the composition of the modern HR department.

January 2015 • Workforce Solutions Review • www.ihrim.org

These are like catnip to HR technology buyers. Do you need to know where your firm’s Affordable Care Act (ACA) compliance stands today? There’s an analytic app for that. These applications sell for a couple of powerful reasons: • The data for these applications rests entirely within the traditional HR applications. • There’s no real new science or technology skill that traditional HR practitioners need to learn. The app has pre-formatted dashboards/reports that display your firm’s compliance or lack thereof.

• Not having one of these apps could be expensive and publicly humiliating for the company if the firm were outed for being out of compliance on fair pay, discrimination or some other matter. • Not preventing one of these costly gaffes would potentially and permanently damage the career of the lead HR executive. A GOJA analytics example is the classic 3x3 grid map that depicts performance evaluation scores against salaries. Some of these get extra spiffing with cool graphs that plot the trend/ direction that an individual’s performance and pay are moving. The problem with these “analytics” is that they rarely deliver more than what HR departments have been doing for years with internal HR data and a spreadsheet.

Motherhood, Apple Pie and the American Way These analytics are less about compliance and more about gaining some incremental insights. Most of the data needed for these analytic apps comes from HR technologies, although some may sneak in from the odd external system. There’s some market traction for these solutions for firms that are recovering from the recession and need new insights, but do not want to add head count in HR to get them. Some of the cooler and more advanced solutions in this space require access to external, i.e., non-HR data. And, this scares HR – big time! Human Resources departments know that they can’t, or won’t, get help from their internal IT group to make these tools come alive. Alternatively, HR leaders know their team lacks the skills to integrate these critical divergent data sources to the analytic tools. An example might help here. A classic MAPAW app involves flight risk or retention prediction. To understand who is likely to bolt and why, an HR department would need access to a number of HR and non-HR data sources. The traditional HR sources might find some of the at-risk individuals, e.g., if someone just got a new supervisor and suddenly went from a highly rated to poor worker status, but the nonHR data sources would provide more clues and possibly more certainty regarding the predictions. The non-HR sources might include: •

Stock option database (“Why has Suzie cashed in all of her stock options?”);

•

Social Media (“Has Bill started to update his LinkedIn profile a lot lately?”); and,

•

Social Media (“Has Esmerelda’s spouse/

significant other taken a new job across the country?”). These non-HR data sources, especially the big data ones, scare the willies out of HR leaders. Don’t get me wrong, most HR leaders find these tools seductive – but they’re too timid to bring them home to their HR department.

Sex, Drugs and Rock & Roll These analytic applications are the “Look but Don’t Touch” analytic applications of the HR world. One purveyor of this kind of app told me that they get hundreds of people to show up for any webinar or demo of these tools – but no one buys them. Imagine if you could understand how much student loan debt your workers have. Would that help your organization better understand what it needs to do to retain its workforce? There’s an app for that. So, there’s the problem: HR technology advanced during the recession, but HR departments didn’t. What if you wanted to better understand what your firm’s employment brand and recruiting brand really are? Well, you’d probably need a big data/in-memory database/analytics tri-part solution. You would want some kind of access to social media (big data) and crunch the data in a tool, e.g., Hadoop, with possibly an analytics or data visualization tool to see/spot an emerging trend. Those are not traditional HR technologies and HR skillsets. If you did this, you’d see that job seekers are ridiculing your firm for its amateurish interview questions. (Yes, people post your interview questions and best possible answers on discussion groups, social media and other sites). An HR executive can talk all they want about having a great recruiting brand, but unless they check the Internet, it’s probably just wishful thinking or speculation on their part. And, this is where analytics truly come off the rails for HR. The data sources, underlying tools, implicit social sciences and more are not mainstay skills of the typical HR department. And, they certainly weren’t common HR skillsets before the recession of 2008. Again, there’s the problem: HR technology advanced during the recession, but HR departments didn’t.

The Needed Changes

Human Resources departments are not ready for new technology now. Before HR gets new technology, it needs new people. Human Resources departments are chock full of great HR transaction folks. Likewise, they www.ihrim.org • Workforce Solutions Review • January 2015

have great recruiters, compliance people and more in these groups. However, is there anyone who understands data analysis, external/big data, etc.? Where are the quants in HR? Where are the statistics and math majors? Where are the social scientists who understand human behavior? Seriously, giving powerful analytic tools to many HR folks today (who lack awareness or skills in these technologies and disciplines) is like giving a chainsaw to a four-year old. If they ever got it running, you’d have a bloody mess on your hands. If you don’t know the difference between causality and correlation, you have no business playing with analytics. A rebalancing of the talent within HR organizations is needed today. New skills, capabilities and insights are needed to make HR more relevant and able to exploit today’s new HR technologies.

About the Author Brian Sommer is president of TechVentive, Inc., a technology research firm. He frequently speaks at major software, professional society and other conferences. He is one of the top research analysts in the ERP space. He writes a column for ZDNet and was recently listed as one of Software Advice’s Authority Award winners in the ERP area. Sommer has published over 600 articles in the technology space including pieces for prestigious publications like Optimize and Wall Street Journal Europe. He is a former partner with Andersen Consulting (now Accenture), where he ran their global Software Intelligence and Human Resources Center of Excellence organizations. He can be reached at: brian@vitalanalysis.com and @BrianSSommer.

The Irony

Recently, a couple of HR practitioners approached me to discuss this skills gap problem. One individual stated that they recently had someone give their two-week notice. Rather than refill this position with another payroll specialist, she’d like to hire “one of those of data analysis” people. She was asking me for clues as to where she could find someone. The irony for this is rich beyond belief – the group that finds new hires for their employer needs help finding the skills they need in their own department. That speaks volumes as to the size of change confronting HR departments and their leaders today.

The Needed Skills

Human Resources teams will need depth in the following disciplines: • Integration Skills – The technologies that HR departments need will only continue to grow. Every day, potentially dozens of new consumer applications pop up that help workers and job seekers find their next true employer. Businesses have to see that HR applications and data sources include way more than just the traditional compliance and processing applications of yore. Integrating the non-traditional, non-transactional data streams into HR (like social media data for sentiment analysis) will tax whatever existing integration skills that exist within an HR organization. • Math/Quant/Statistic Skills – This is where the world of HR meets the science, technol-

January 2015 • Workforce Solutions Review • www.ihrim.org

ogy, engineering and mathematics (STEM) world headlong. I think I’ve covered the rationale for these skills above. • Social Sciences – Analytic apps follow two paths. One path, search and discover, scans a large volume of data looking for anomalous results. The other relies on a savvy person crafting a number of hypotheses to test. The latter process requires one to determine what internal or external data source may possess clues to this theory. Personally, I think the latter is the correct path, as the former may find a lot of things that are interesting, but not impactful or critical in the short term. Who in your HR department understands how a sociopathic job applicant thinks or uses social media? Who can construct social science-driven inquiries and analyses? • Cosmopolitan/Curious/Continuous Learning Skills – Human Resources needs curious people. If your HR group waits until an HR vendor comes knocking on your office door in Cedar Rapids, you’re not cosmopolitan, curious, current or even relevant! Waiting for new tech to come to you was a luxury of the past. Today, it’s a business and competitive necessity to be right there with the coolest software developers and brilliant minds in HR. Can you really say your HR team is current in today’s HR technology space? • Business Savvy – The volatility of businesses today requires a more nimble HR group. Businesses need an HR organization that is anticipating future work plans, workforce changes, workforce needs, etc. Does your HR team have people with intense and current operational knowledge?

Human Resources’ Relationship with IT and the Executive Committee It’s time for HR to mend fences with IT and the executive committee. The recession is over and HR needs some serious retooling. Human Resources needs new/different/additional talent. Human Resources needs new technology. Human Resources data is no longer constrained to traditional HR transaction systems. The information needed to competitively hire and retain great people rests in digital water coolers, social media, powerful analytics and more. To reskill and make HR more relevant, HR will need help (financially) from the firm. It will need access to IT talent. It will need to grow. To do all of this, it needs the support of the executive committee and IT. A better HR group is what businesses need today. The company is the loser if HR doesn’t heal.

feature HR Technology: Not Just for HR Administrators Anymore By Cecile Leroux, Ultimate Software

f you asked your HR technology provider who its end user was 5 to 10 years ago, it would have likely said, “Well, HR staff of course.” Ask today and hopefully its response will be “everyone in the organization.” Traditionally, HR technology has been focused on addressing the functional needs of HR leaders, payroll, benefits, compensation and talent professionals. These products helped automate processes and streamline transactions, but have done little to engage employees and may negatively impact adoption among the broader workforce. In the last decade or so, primarily due to the rise of mobile technologies, people’s expectations of technology have changed dramatically, including in the workplace. They want experiences that are simple, effective, and enjoyable like consumer technologies. For today’s employee, as well as today’s HR and payroll teams, the quality of the product is as much about usability as it is about functionality. Providing a great user experience (UX) for employees has become a smart business initiative and the new imperative for HR technology providers – and one that delivers optimal results: When their technology is more social, mobile, and accessible, users become more engaged, productive and fulfilled, which results in a positive impact on the bottom line. In fact, according to a Hewitt Research study, in companies where 60 to 70 percent of employees were engaged, average total shareholders’ return (TSR) stood at 24.2 percent and in companies with only 49 to 60 percent of their employees engaged, TSR fell to 9.1 percent. Companies with engagement below 25 percent actually suffered negative TSR.1 A good user experience is much more than just a clean user interface (UI). Far from simply “looking good,” a great user experience comes from a mix of making a person’s work meaning-

ful, focusing on what is most important to employees based on their role, as well as usability engineering factors that include form, function and aesthetics. This requires a paradigm shift in the approach by focusing on the person first and then building out solutions from the person’s perspective versus focusing solely on the processes. Designers of this new breed of HR technology consider the habits, experiences, and expectations of people in real-world scenarios and then tailor the products to simplify their personal and work lives. The ultimate goal is to deliver experiences that are engaging and meaningful, or so transparent and natural that end-users don’t even notice the technology. Typically, you expect to see user experience at its best in consumer-level products, software and websites. Social media sites, mobile apps, and digital music services are additional examples of areas where user experience is increasingly emphasized today. With the dramatic evolution in the workforce in recent years, HR technology has demanded this kind of personcentered design. Today’s employees expect the systems they use at work to mirror their personal experiences with technology. In other words, they expect their HR solution to “just work,” and software that gets in the users’ way when they’re trying to complete a range of tasks is considered obsolete. To better support your employees and your overall business, here are five critical UX features to consider when searching for a human capital management (HCM) solution that is truly designed for your entire workforce: • Ensuring context; • Task simplicity; • Real, responsive design; • Thoughtfully consistent experiences; and, • Leveraging game mechanics.

www.ihrim.org • Workforce Solutions Review • January 2015

Ensuring Context How many times have you stumbled around in an application, clicking blindly and thought “there must be a simpler way to accomplish this?” If this sounds familiar, you’ve experienced what UX professionals call a “loss of context.” People experience a loss of context when they are forced to stop and wonder how to complete a task. Human Resources solution providers should focus on what is most important to the user, from his or her perspective, and remove stumbling blocks. Our brains have the ability to process a remarkable amount of information, but when taken out of context, we can struggle to find a path through even the most basic applications. If a business tool is unpredictable, the loss of context can lead to negative consequences for a business, including lowered employee productivity and performance. While the solution to loss of context is frequently framed as aiming for “fewer clicks” – ideally, an engaging HR solution UX aims for no clicks – the information users need is right there in front of them, with no need to dig for it. A role-based dashboard screen is a perfect example of a well-designed user experience with rich context. The information you use most frequently is brought to the forefront for instant access. Rich dashboards empower users to efficiently complete many tasks with no clicks, and supporting information is immediately available when needed.

Task Simplicity People love simplicity. It’s evident everywhere, from the kinds of coffee makers we buy, to the mobile applications we use. Complex products or interfaces that confuse, frustrate, and burden people often suffer from poor market penetration and high rates of user abandonment. In an effort to obtain user feedback and make improvements, research has been conducted to analyze the real-world usage of applications. Usability testing (in which users are observed completing real-world tasks) combined with eye-tracking research has shown that offering only the most important, frequently accessed functions at once is valued over having several options available.

January 2015 • Workforce Solutions Review • www.ihrim.org

An HR solution that provides an at-a-glance display, or dashboard, of your employee’s most frequent and critical activities is the one you want to look for. The best offerings employ a grid or card-based layout, offering common tasks in a visual format that’s easy to distinguish and select. These layouts also employ simple, clear iconography in place of standard text. With simple interfaces, you can save time and reduce frustration for your employees, while increasing satisfaction and productivity.

Real, Responsive Design

It likely comes as no surprise that the largest generation in history – the Millennials, also known as Gen Y – are fond of their smartphones. In fact, 83 percent of Millennials own a smartphone, and more than 50 percent use it for activities other than talking and texting. This trend translates directly from home life to the workplace. Today’s employees expect to be able to perform work-related functions just as easily on their phones as they would when sitting at a computer. Best-in-class HR solutions will adopt a person-centered user experience, whether the technology is designed for a laptop computer or a mobile device. The expectation is that when you use any mobile device (phone, tablet, etc.) to access your HR solution, the experience is compelling, responds appropriately, and uses gesture-based interactions like touch. This is called “responsive design.” Well-crafted responsive experiences take into account the limitations and unique capabilities of each device, as well as the context of how these devices are used in the real world. A person using a smartphone walking down the street has been described as interacting with his or her device with “one thumb/one eyeball.” He or she has one eye on the destination, one eye on the phone, and

often just one thumb poised over the phone to take action. In this context, HR solutions must remove or minimize unimportant information and empower the user to complete his or her task with the least overhead possible. If a solution is loading large, time-consuming images on your phone, or displaying small, difficult-to-target controls, then the design is missing the mark.

Thoughtfully Consistent Experiences Consistency within a product’s user experience has long been linked to usability. But, when considering the right HR solution for your workforce, there is more to judging consistency than whether all the screens look the same. The standardization of user experiences can aid users in areas such as system navigation. Once the user becomes accustomed to the approach, navigation should become second nature from that point on. A best-in-class approach to consistency is one that standardizes patterns of the user experience that are designed specifically for HCM business cases, validated with testing. This approach results in design solutions built for real business cases and explores whether these can be used across the entire product. Clearly, putting the person at the center of the experience and building outward from their perspective gives the solution a familiarity and relevance that supports productivity and engagement.

Leveraging Game Mechanics Gamification is an aspect of design that should not be ignored. According to Gartner, “By 2015, 40 percent of Global 1000 organizations will use gamification as the primary mechanism to transform business operations.” And, as mentioned earlier, the workforce is becoming more tech-savvy, and expects interactions in the workplace to mirror what they see in their personal life, social media, and even their games. Gartner also predicted that “By 2014, 80 percent of current gamified applications will fail to meet business objectives, primarily due to poor design.” Clearly, gamification is not easy. And, all too often developers try to apply gamification to business applications as a way to address the problem they are really trying to solve: user engagement. After all, engaged employees are more productive. Companies with engaged workforces have better margins, better shareholder returns, and better performance-to-cost ratios. Here are some well-tested methods that can promote engagement and increase user adoption through gamification:

• Providing Guidance – Visual cues or even virtual tour guides can prevent people from giving up should they become confused. In this context, users that solve a problem, even with assistance, feel empowered, leading to longevity and sustained attention. • Social Mechanics – These are community-building features such as chat, sending thank you notes, and other messaging systems. Additionally, voting can create a clear signal that something is important and the whole community of users can see it. • Motivating Repeated Interaction – Creating a level of engagement keeps users “in the game” longer and keeps them coming back. Game mechanics that drive this kind of repeat engagement are advanced user paths, unlocking content as a reward, time pressure, scarcity and achievement badges. Gamification is not a goal or end-state. It is a method that should be incorporated at the design foundation and in the service of your true vision: an engaged workforce. These concepts work very well to encourage behavior with an existing audience, making it ideal for certain areas like onboarding and recruiting, performance management, and employee recognition and referral programs.

Conclusion It’s time to put the person first when designing HR technology before it’s too late. Invest in a solution now that your employees will be delighted to use, or pay the price in employee engagement and lost productivity later. A poor user experience isn’t a mere inconvenience or frustration – it has a tangible negative impact on your talent and, eventually, your bottom line. If you seek out a solution with the features identified above for your organization, you’ll reap a multitude of benefits, from shortened time to complete tasks, fewer support calls for standard processes, simplified access to the information your people need most, and a happier and truly engaged workforce.

Endnotes 1 Source: Employee engagement at double-digit growth companies, Hewitt Research Brief, http://www.forbes.com/sites/ kevinkruse/2012/09/04/whyemployee-engagement/2/.

About the Author Cecile Alper Leroux is Ultimate Software’s vice president of Product Strategy and Product Management and is responsible for defining and carrying out the global vision and strategy for Ultimate’s human capital management solutions. Passionate about people and the global user experience, she strives to put people first when it comes to technology. She has over 20 years of experience, both as an HR practitioner and with HRMS product strategy, sales, and implementations in the United States, Latin America and Europe. She can be reached at cecile_leroux@ultimatesoftware.com.

www.ihrim.org • Workforce Solutions Review • January 2015

2015 Annual Buyers Guide The 2015 Annual Buyers Guide will serve as a valuable reference tool. For your convenience, the guide has two sections: a Categorical Listing and an Alphabetical listing. In the Categorical Listing, companies are listed under the product and service categories of their choice. For information on a specific company and its products and/or service, please refer to the Alphabetical Company Listing. While a listing in this guide does not constitute an endorsement by IHRIM, it does indicate that these companies are interested in serving the needs of HRIS professionals. We hope this Buyer’s Guide will assist you in your 2015 purchasing decisions.

Product Categories

Core HRMS

Ceridian Kronos Incorporated Optimum Solutions, Inc. PDS StarGarden Corporation Ultimate Software

Benefits Management

Benefits Outsourcing/ASP-Flexible Benefits bswift COBRA Ceridian

Business Intelligence

Analytics Ceridian Kronos Incorporated PDS WorkForce Software Dashboards Ceridian

Compensation Management

Deferred Compensation Decusoft Executive Compensation Decusoft Incentive Compensation Decusoft

Employment Systems & Services

Paid Advertising

Ceridian On-Premise Optimum Solutions, Inc SaaS Ceridian Optimum Solutions, Inc Ultimate Software WorkForce Software Self Service Ceridian Telliris WorkForce Software

Integration

Ceridian

Onboarding

Payroll Software

Ceridian Kronos Incorporated PDS Ultimate Software

Payroll Services

Payroll Outsourcing Ceridian Tax Ceridian

January 2015 • Workforce Solutions Review • www.ihrim.org

Performance Management

Ceridian CRG emPerform

Self Service

Employee Self-Service (ESS)/Manager Self-Service (MSS) Accu-Time Systems, Inc. Ceridian Kronos Incorporated Optimum Solutions, Inc PDS Telliris Ultimate Software WorkForce Software

Time & Attendance Systems

ADP Screening and Selection Service Ceridian

e-Recruiting/Application Tracking Ceridian First Advantage

HR Service Delivery

Accu-Time Systems, Inc. Asure Software Ceridian Kronos Incorporated Optimum Solutions, Inc PDS Telliris WorkForce Software

Workforce Management

Contingent Workforce Management Ceridian WorkForce Software Forecasting & Scheduling Accu-Time Systems, Inc. Ceridian Kronos Incorporated WorkForce Software

2015 Annual Buyers Guide

Alphabetical Company Listing* *Systems and applications referred to in this section are trademarked, registered, or in progress. These names should not be used generically.

Asure Software Accu-Time Systems, Inc. 420 Somers Road Ellington, CT 06029 Ryan McColgan 860-870-5000 860-872-1511 info@accu-time.com www.accu-time.com ATS, an Amano company is an innovative global provider of industrial time and attendance terminals for biometric and non-biometric workforce management requirements. The high quality, durable and user-friendly product line extends from entry-level time and attendance terminals to state-of-the-art programmable and best performing biometric workforce management and employee self-service systems. www.accu-time.com.

ADP Screening and Selection Services 301 Remington Street Fort Collins, CO 80524 970-490-7851 adphire@adp.com www.adp.com ADP’s Screening and Selection Services has the tools and expertise to quickly and accurately scrutinize the backgrounds of your candidates. Our flexible background screening services include candidate verification, criminal searches, reference verifications, registries, drug testing and other public record searches. The screening you need, from a name you trust. See ad on Back Cover

Ceridian

110 Wild Basin Road, Suite 100 Austin, TX 78746 Asure Sales 888-323-8835 sales@asuresoftware.com www.asuresoftware.com Asure Software helps companies better manage their global, mobile workforces with SaaS-based solutions that bring people, time, space and assets together in a meaningful way. Our workplace and workforce management solutions offer innovative ways to help you accommodate the needs of your agile workforce.

3311 E. Old Shakopee Rd Minneapolis, MN 55425 Resource Center 800-729-7655 onesource@ceridian.com www.ceridian.com/IHRIM Ceridian is a leader in human capital management with more than 100,000 clients in over 50 countries. We deliver trusted results and transformative technology with a wide range of solutions including human resources, payroll, workforce management, talent management, tax compliance, benefits, employee assistance and wellness programs.

bswift 10 S. Riverside Plaza, Suite 1100 Chicago, IL 60606 Jillian Daub 312-373-3470 312-928-0640 sales@bswift.com www.bswift.com bswift offers software and services that streamline benefits, HR and payroll administration for employers and exchanges nationwide. bswift’s state-of-the-art cloud-based technology, outsourcing solutions and Springboard Marketplace exchange platform significantly reduce administrative costs and time-consuming paperwork, making life easier for administrators and millions of consumers who enroll in benefits with bswift.

CRG emPerform 6 Antares Dr. Phase 1 Suite 200 Ottawa, ON Canada, K2E 8A9 877.711.0367 613.232.7276 info@employee-performance.com www.employee-performance.com Still using paper to assess employee performance? emPerform delivers awardwinning all-inclusive software for powerful, simple and affordable talent management; flexible online appraisals, easy goal management, compensation planning, 360° reviews, reporting, succession, social feedback and template libraries for quick & easy setup. Book your live demo at www.employee-performance.com

www.ihrim.org • Workforce Solutions Review • January 2015

2015 Annual Buyers Guide

Decusoft 70 Hilltop Rd. Ste. 1003 Ramsey, NJ 07446 Karie Johnson 201-258-1414 201-785-0774 Karie.Johnson@Decusoft.com www.Decusoft.com You have an HCM software suite but you are managing compensation outside the system. Now what? You need COMPOSE, a specialized compensation management software solution that handles any level of variable compensation complexity, reduces your total cost of compensation administration and integrates with existing HR solutions. Not so suite but oh so right. See ad on Inside Front Cover

Kronos Incorporated

PDS

297 Billerica Road Chelmsford, MA 01824 Sales 800-225-1561 info@kronos.com www.kronos.com With tens of thousands of customers around the globe, Kronos is the leader in workforce management solutions. We deliver industryfocused time and attendance, scheduling, absence management, HR and payroll, hiring, and labor analytics solutions and services – in our cloud and on the go. Kronos: Workforce Innovation That Works.

470 Norristown Road, Suite 202 Blue Bell, PA 19422 George Brady 610-238-4617 610-238-4574 gbrady@pdssoftware.com www.pdssoftware.com Vista HRMS is a core suite of HR, Payroll, Benefits, Self- Service, Mobile, Workflow, Analytics, Time Management and Recruiting components. Vista combines Position and Employee management. Vista’s intelligent crossborder capabilities manage U.S. and Canadian employees in a single database. It is available On-Premise, Hosted or SaaS, utilizing the .NET framework.

StarGarden Corporation

First Advantage 1 Concourse Parkway NE, Suite 200 Atlanta GA Shari Hubbert 866.400.3238 solutions@fadv.com http://fadv.com As the trusted partner of (over 45,000 organizations worldwide, we at First Advantage provide easy-to-understand background checks so you can confidently make decisions about prospective employees, and contractors. Now in 28 locations, 13 countries, First Advantage conducts over 23 million international background screens annually. Trusted Knowledge. Exceptional People.

Optimum Solutions 210 25th Avenue North, Suite 700 Nashville, TN 37205 Scott Henderson 615-329-2313 615-329-4448 sales@optimum-solutions.com www.optimum-solutions.com Optimum Solutions provides Payroll, HR and Time & Attendance software for both the Windows and iSeries platforms. All applications share one master file database eliminating all double entries. Our applications are developed and supported internally, giving your company the individual attention it deserves while providing with a complete HRIS system.

January 2015 • Workforce Solutions Review • www.ihrim.org

300-3665 Kingsway Vancouver, Canada V5R5W2 Marnie Larson 800-809-2880 info@stargarden.com www.stargarden.com Let StarGarden’s 30 years of experience help manage your most important resource. Get the right resource on task at the right time with StarGarden’s advanced HCM, Payroll, and Workflow functionality.

2015 Annual Buyers Guide

Telliris 4 Armstrong Rd Shelton, CT 06484 Sales Department 203-924-7000 sales@telliris.com www.telliris.com Mobile Enable your Time & Attendance with Telliris. It’s integrated and ready to use with many packages (Ceridian, Focus, HBS, Identatronics, Infinisource, InfoTronics, Insperity, Kaba Workforce Solutions, Kronos, Renova, ScheduleSoft, Sense Software, SumTotal Systems, Time Link, UniFocus, and Workforce Software). Apps include Absence, Accruals, Crew Clock, Employee Messaging, ESS, Scheduling, Time Clock, Time Sheet, and Time-off Request. It’s ideal for organizations with dispersed, remote, or mobile employees. Please contact Telliris or your Time & Attendance vendor for details.

WorkForce Software

Ultimate Software 2000 Ultimate Way Weston, FL 33326 Sales 800-432-1729 954-331-7300 ultiproinfo@ultimatesoftware.com www.ultimatesoftware.com Ultimate Software’s cloud-based UltiPro helps simplify employees’ work lives. With UltiPro, you can deliver personalized talent acquisition experiences, guide employees through important benefits choices, simplify payroll computations, manage time and attendance, and support continuous and proactive talent management. HR and payroll professionals can leverage UltiPro to drive smarter, people-focused decisions. See ad on Inside Back Cover

38705 Seven Mile Road Livonia, MI 48152 Sales Department 877-493-6723 info@workforcesoftware.com www.workforcesoftware.com WorkForce Software is the leader of complete, easy-to-use workforce management solutions. Its EmpCenter suite enables strategic HR by automating and streamlining interactions between the employer and its workforce, enabling organizations to better manage payroll and processing costs, help ensure compliance with labor regulations, and increase productivity and satisfaction of employees.

www.ihrim.org • Workforce Solutions Review • January 2015

Multidimensional Workforce

Digital Technology Demand is Transforming HR By Jill Goldstein, Accenture Resources managers face a fresh set of opportunities and challenges as a result of fast-evolving digital technology. Employees are bringing their consumer-based expectations into the workplace and, as a result, organizations are under pressure to adapt how they interact with customers and manage their operations and workforces. However, embracing the rise of digital is still a big step for many HR business process outsourcing (HR BPO) buyers and service providers. As a result, many outsourcing engagements have remained stuck in the analog world – rather like employing a rotary telephone, when everyone else is using a smartphone. Recent Accenture-sponsored research from HfS Research shows that two-thirds of today’s BPO engagements remain in the analog “lift and shift” stage, where existing processes are simply transferred to an external provider with little added value. Buyers are not satisfied. According to the study, most expect to undertake a wide-scale transformation of their business processes through the greater use of technology within the next two years. So, how can both outsourcers and buyers step up to take advantage of the opportunities that innovative digital technologies offer? Those that have made this leap are using technology to achieve significantly higher value results. They’re automating standardized processes and workflows, enabling processing in the cloud, optimizing analytics, and embracing mobility for rapid implementation and payback. Four key components are needed for high-performance digital operations and HR services:

November 2014 • Workforce Solutions Review • www.ihrim.org

1. A resilient digital platform that is secure, available on demand, and easy to set up and use – The digital platform

is at the heart of HR operations. It’s where intelligence is leveraged and insights moved around the organization. Dynamic, accessible and continuous, it must have the ability to respond rapidly to changing developments in the career marketplace and within the business. With more processes interconnected and automated – resulting in shortened development cycles, increasing the frequency of updates and the likelihood of cyber-attacks – service providers must focus even more on building secure, scalable and agile systems. The need for an always-on HR platform stems from many businesses no longer operating 9 to 5, because of their large, geographically distributed and virtual workforce, and the platform must be reliably accessible to all the users it is designed for. It needs to be logical and configurable to the needs of different categories of users. It must also be remembered that these platforms are still complex and can take months to get right. It is important that the platforms can be accessed by employees from a variety of devices, with intuitive options and contextual search.

2. Anywhere, anytime digital insights that improve business performance –

Advanced HR analytics technologies enable buyers and service providers to overcome traditional reporting capabilities that merely reveal what happened to their talent management or recruitment, for example. Predictive analytics can move a business from a reactive to a proactive state, allowing buyers to look around the bend and see what’s coming next. Digital operations

enable the use of both internal and external talent and development data, providing a richer context for interpretation and action. This means taking data from being siloed and unmanaged to becoming more integrated across the enterprise, and turning it into useful and actionable results. In HR, embracing analytics is critical. There is a war for talent, particularly in areas such as digital marketing, IT security and programming. Businesses rely on digital insights to show them how their brand is perceived by the public and by specific audiences of potential employees, as well as to inform recruiters where the talent is located. Systems also help recruiters identify the profile of an ideal candidate for strong retention and performance, as well as to predict the likelihood of candidates accepting a job and arriving on their first day. The technology helps give key managers much better insights for their decisions.

3. A platform connecting digital information workers, using advanced monitoring, search and analytic tools – This gives connected workers everything they need to complete tasks, including training and reference materials, access to peers and supervisors, instant availability of tools and required information. With the platform and its applications sensing, even anticipating, the needs of workers and putting together the right mix of resources required – including social media and collaborative tools – the experience becomes seamless from start to finish. It transforms how work is conducted and changes the nature of the work in a way that heavily influences employee engagement and retention. As a result of these connected digital capabilities (which may include relevant content from blogs, websites and forums), those working on HR BPO engagements become “information detectives” and “continuous improvement specialists,” rather than transaction processors. Historically, outsourcing and shared services provided case management tools and contact centers for logging and managing incoming calls. Now, their integrated, connected digital platforms offer advanced workflow management, and strong and

consistent processes. Shared user interfaces are equally vital, and in an effective system on-screen, at least three quarters of the information is shared by any user from HR, to contact centers and employees, with everyone able to see a ticket and help it get resolved.

4. A digital innovation ecosystem with multiple partners, consultants, developers and vendors – Neither HR BPO buyer

nor service provider can sustain high performance without relying on others across the business and technology ecosystem. These relationships enable both parties to know what new tools and technologies are in the marketplace or in development that may improve productivity and time-to-results. In addition to being open to established partners and vendors, and the “usual suspects” from the IT and business worlds, such an ecosystem offers connections with research institutions, universities and government agencies. Working with multiple partners also ensures stability and breadth of coverage. While it’s impossible to predict the future, having a broad range of options on systems enables much more reliable success and progress. All HR roads lead to digital operations. To transform from analog to digital, HR organizations must integrate new technology that will allow them to reinvent themselves and get out in front of the dramatic changes in the highly competitive market for recruiting, About the Author Jill Goldstein leads Accenture’s Talent & HR retaining and developing Operations practice, responsible for driving employees. Businesses growth of the Talent & HR Operations offering must figure out how they through delivering client value. Her role as global will define their place in offering lead includes developing the long-term this new, fast-changing strategy, investing in building capabilities, and working with environment. clients on potential solutions. She has more than 20 years of

experience as a practitioner, and since joining Accenture in 2006, she has played an integral role in bringing high business value services to Accenture’s Talent & HR Operations clients. This year she received the industry’s highest honor, the HR Outsourcing Association’s Global Thought Leader of the Year Award, and received the Accenture Innovator of the Year Award for her contribution of patent-pending methodologies for “Workforce Forecasting and Analytics” and “Translating Business Strategy into HR Action.” She holds a Bachelor of Science degree in Accounting from Indiana University Bloomington, Kelley School of Business, and an MBA from Loyola University-Chicago. She can be reached at jill.goldstein@accenture.com.

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Executive Interview WSR: Welcome to this edition of the WSR Executive Interview. We thank JoAnne Kruse for joining us today and we’ll begin with a brief introduction. JoAnne: I currently serve as the chief human resources officer for American Express Global Business Travel (GBT). Previously, I was the founder and a partner of an HR consulting firm, Human Capital Partners, which provided services to companies in the areas of talent development and coaching, compensation and benefits, and support of acquisition and integration projects. Prior to founding Human Capital Partners, I served as executive vice president of Human Resources for Travelport LTD. I also held the role of executive vice president of Cendant’s Travel Distribution Services Division, the predecessor to Travelport. And prior to Cendant I worked in human resource roles with Chase Manhattan Bank, Clairol and PepsiCo. WSR: Thank you. We’ll start with what is really the key question of our interview: What trends do you think are disrupting the way HR is perceived or how it conducts its business? JoAnne: I think there are two key trends that are disrupting how HR conducts its business and how it is being perceived: the consumerism of HR information and the demand for data and its analysis. The first trend has absolutely changed, and continues to change the way employees and managers interact with HR. They and the business expect to have access to information 24/7 and to be able to chat with someone at any time. This is very empowering from an organizational perspective – it creates a direct line of communication with the employee. But, at the same time, it also creates a lot of pressure on the HR organization to have accurate information and to be available at all times. As an employer, if you are focused on employee engagement, your ability to assess individuals is key to finding the right fit for future career opportunities. This really drives the second trend I mentioned, which is having the data, methods and tools to evaluate

January 2015 • Workforce Solutions Review • www.ihrim.org

talent and career connections. Rather than assume a conventional model for career development, it is becoming increasingly important to be able to draw out the probabilities of an employee’s success in a role based on capabilities, behaviors and performance, and to develop skill gaps and solutions that build talent pipelines. This is a tremendous data requirement and also assumes that there is a skillset within HR to analyze the data. One can no longer sit with an employee and simply ask him or her, “What do you want to do?” They expect more. WSR: Do you see any new or even existing HR technologies contributing to these disruptive trends? JoAnne: Absolutely. In certain cases, they drive the disruption. If you think of how self-service changed the relationship model between HR and employees and managers, the same is happening with data and how it is collected, connected and analyzed. The disruptive trends I mentioned before are changing the way we manage human capital information and how we interact with it. The demand for technology, especially around data analytics, is the key. WSR: Which industries do you think are more open to accepting disruptive HR paradigms and their technology enablers? Which ones are less open? JoAnne: In my experience, it really has less to do with an industry, and more to do with the culture of the company and the investment they have made, or are willing to make, in technology. WSR: Introducing any change into an organization is hard enough, disruptive ones even harder. As an experienced HR leader, what advice do you have for companies to successfully adopt disruptive changes? JoAnne: The consumer model we experience online on a daily basis is a very good model to adopt by HR. Just like e-commerce engages its customers, HR needs to think about

their business the same way. For example, what value does the employee obtain from interacting with HR? From a self-service perspective – where is the upside of an employee that takes the time to participate in self-service transactions, and what will he or she get in return? The same questions apply to the value proposition for a manager. Therefore, HR needs to ask: “How do I deliver value to the employee with all the information I collect from him or her?” This model requires you to manage and deliver information contextually – the same set of information, but in a different context when used by different processes and value propositions. WSR: Do you think a strong communication department within HR is important for managing disruption? JoAnne: Yes, it is huge, regardless of whether the disruption is occurring within your HR organization or not. It is like having your own “marketing department.” Being able to integrate visual, messaging and data elements is critical. Therefore, understanding PR, marketing and promotions is important. If you go to a model of consumerism, you need to use these tools as we are selling a vision or idea continuously. You need to ask yourself the question: How do I drive “customer loyalty?” WSR: How do you really transform and manage HR so that it is truly seen as a strategic partner to the business? JoAnne: If HR is really going to be a strategic partner, it depends on its transformation. What successful transformations have in common is that there is a clear value proposition to the business. The HR organization has to have a very strong understanding of the operation and business drivers and has to have the skill to operationalize these drivers within the HR context. Real HR credibility comes from being able to deliver on core HR functions, but in a way that drives business process – and results. Human Resources asking to have a “seat at the table” is already a problem; if you have to ask for it, it means you are probably not ready.

WSR: What will be different, i.e., skills, technology, operations, in an effective HR organization a decade from now? JoAnne: My guess is that we will have more sophisticated data analytics modeling on the future success of employees or in assessing the success of external talent in an organization. How we evaluate performance will be different; it will become dynamic instead of a once- or twice-per-year activity. When we have the ability to continuously integrate data points into a manageable scorecard or data set, we can man“How do I deliver age performance and performance value to the emfeedback in a very dynamic way. You will also see more “deskilling;” in ployee with all the other words, the mainstreaming of information I collect technology. You will no longer need to know how to program. You will from him or her?” need to have less of an understanding of technology but will have to make it more accessible and easier to adopt and use. A good example is the explosion of mobile devices over the past few years. Acceleration of devices and the access to technology is clearly a factor that will play even further. At the same time, however, you could continue to see the possible polarization of technology adoption – the have and have-nots. But, maybe not! Look at third-world countries in Africa or Latin America – they have access to the same mobile technology as we do, even if other technology access is more limited. WSR: So, do you think “quants,” or experts in quantitative analysis, are needed in HR? JoAnne: Absolutely, and you already see it now. Very few areas have as much data as HR. You really need social scientists. It is not only the quantitative aspect, but also qualitative perspective that you need to be able to interpret the data. WSR: JoAnne, thank you for giving our readers your insight into this issue’s topic.

www.ihrim.org • Workforce Solutions Review • January 2015

Product Focus

Employee Referral Program Best Practices for 2015 By Hilary Dunn, Zao

There’s a reason why employee referrals are named the number one source of hire year after year. By now, you’re probably aware of the benefits provided by employee referral programs, and why they are the best source of hire. Our research shows that referrals are the highest-quality hires, and they perform best on the job compared to all other sources. To top it off, referrals have the highest retention rate after one year of employment. If referrals have always been number one, what’s changed in the employee referral program industry? You may have guessed it; social media has grown tremendously in the last decade. Since social media has revolutionized the way we live our lives, it has simultaneously influenced hiring and employee referral programs. This rise in social

network activity has created new opportunities for employers to tap into employees’ online social connections for referrals. In addition to increased activity on social media, there has been an equally large amount of growth in the use of mobile devices, and 82 percent of companies now allow employees to use mobile devices at work. Since employees are often on the go, it’s important that they are able to access referrals at any time. The combined powers of social media and mobile devices have had a great impact on the way we hire, and expanded upon the network of opportunity available for referrals. These changes have brought about a new and different use for employee referrals, which created the need for enhancing traditional referral programs. Zao’s social employee referral platform helps boost referral best practices, using automation, social networks, gamification and mobile devices. A successful referral platform is created through the combination of these features, bringing all the elements together. Let’s take a look at the top-five ways to boost your existing employee referral program this coming year:

1. Automation Automation lets you do things you would normally have to do manually. In employee referral programs, these can include posting jobs on social networks, and updating employees on the status of their referrals. Job sharing on social networks can often be time-consuming, and in order to involve your network, it’s important to share jobs

January 2015 • Workforce Solutions Review • www.ihrim.org

on a regular basis. If a job is shared regularly, there is a much higher chance that the posting will be seen by a larger percentage of your network. Give your employees the ability to choose which social networks they would like to post jobs on, and allow them to pick a frequency as well. When it comes to updating employees on the status of their referrals, this can be a very time-consuming task. Employees will often send emails, or even stop you in the hall asking what happened to a certain person they referred. Many referral programs are still operating in this manner, and do not update employees on the status of their referrals. Implementing a system that automatically updates employees on their referrals is crucial to their continued engagement and participation. Zao takes the work out of referrals by automating recurring referral tasks including auto-posting jobs and sending automatic referral status updates to employees.

2. Social Networks Traditional referral programs don’t involve social networks, and rely simply on employees forwarding referral candidates using email. With employees being more connected than ever, there is a huge opportunity of contacts that can be reached socially. Finding candidates on social networks can be optimized using smart matching technologies. Smart matching automatically pairs the contacts of your employees on LinkedIn and Facebook with your job descriptions, helping employees find the best matches for the job. From there, recommending a candidate is only a click away. In addition to being able to find relevant candidates, employees can also directly share jobs on social network groups, bringing you more relevant candidates. Zao has built these social network referral best practices into its platform, making it simple to engage employees

3. Gamification Gamification is the use of game mechanics (such as points and leaderboards) to encourage engagement in employee refer-

ral programs. It’s a great tool to avoid the dreaded post-launch drop in participation that most employee referral programs face. It’s also a great way to keep employees engaged in referrals in the long run, and is designed to give points and credit at different stages in the referral process, not just when a referral is hired. Finding candidates Gamification is often used to make referral programs fun. Offering on social networks points and badges for achievements can be optimized in your referral program and allowing these points to be redeemed for using smart prizes is an exciting way to switch matching things up, e.g., if someone refers technologies. three qualified applicants and offers a small prize in return. In addition, creating a leaderboard for your referral program and showing the top employees and the number of referrals they have made keeps people engaged as they can see their efforts being recognized. You can get as creative as you like with gamification referral contests for your employees. With Zao, employees automatically get credit for all referral actions in the platform, making it easy for you to gamify your program.

4. Mobile Mobile recruiting is a growing trend. So, why are many companies still not implementing mobile hiring, especially when it comes to employee referral programs? Since mobile capabilities often streamline the way we live, they are especially important when you want to look up information quickly and easily. For this reason, it makes sense to apply mobile concepts to your hiring strategy, and particularly your employee referral program. According to Mashable, 19 percent of job seekers use mobile devices to view open positions, but 57 percent would like to use mobile devices to search for jobs. What this means is that if you don’t have a mobile career site with access to job pages, you’re missing out on a number of applicants who are looking for jobs from their mobile devices. In addition, 23 percent of searches with the word “jobs” come from mobile devices. The first step here is to make sure that your career site is mobile optimized, and jobs can be easily viewed from mobile

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devices. In addition to this, why not allow employees to refer candidates on the go? Often, when people are networking and meeting new people, they are not behind their computer. Allowing employees to refer using mobile devices is the key to the future of referral programs. With Zao, all referral programs are automatically mobile optimized and compatible with all devices.

5. Extending Rewards Your employees only have a certain number of contacts. For this reason, why not open referrals up to your former business partners, vendors, and even the trusted contacts of your employees? These people can refer great candidates as well. The About the Author problem with extending your reHilary Dunn is in charge of ferral program is that these exterMarketing at Zao, the employee nal referrers don’t have the same social referral platform. She has worked with many companies, intrinsic motivators that your ensuring the launch and success employees have, such as working of their referral programs. She passionately with a friend. People outside your believes that trusted referrals are the best way to direct network of employees need hire! Connect with Hilary and Zao on Facebook, additional motivators to refer their Twitter, and LinkedIn. friends, and that’s where extending rewards comes into play. By extending your referral rewards to outside referrers, you’re opening up referrals to trusted contacts who aren’t necessarily your employees. CareerXroads found that 43

January 2015 • Workforce Solutions Review • www.ihrim.org

percent of companies hired a non-employee referral. In addition, Zao found that 69 percent more referral hires were reported when non-employees were involved and rewards were offered. When creating a referral program strategy, extending rewards is definitely an option to consider. Zao takes care of all payments to non-employees, saving you any extra accounting and tax work. Planning out your employee referral strategy is an important part of making the program successful. Set goals for your program throughout the year, and automate any tasks that are repetitive. You will not only find better referrals, but you will notice that your employee referral program is more efficient for you and your network overall. Interested in learning more about employee referral programs? Check out Zao’s free 16 Employee Referral Tip Ebook. “Statements and opinions expressed within this article are not product or service endorsements of IHRIM’s Board of Directors or its members, including the IHRIM Editorial Committee, Editorial Advisory Board and the publisher of Workforce Solutions Review magazine.”

The Back Story

Why What You Did Yesterday Won’t Work Tomorrow By Katherine Jones, Bersin by Deloitte

When HR wasn’t looking, the world changed. Sure, HR got the global economy, the global workforce idea, but there’s more – much more – in store. Let’s consider: 1. Who rules? Nope, it isn’t really you – it’s your employees. And, they aren’t your grandpa’s employees anymore. They live on their mobiles, love on their mobiles, and conduct their transactions in three swipes/clicks or fewer. Do your employee-facing applications meet up to their expectations? Intuitive? Social? And yes, a bit glitzy? You snooze, you lose on this one – modern workers go to companies they see as “with it” – and your applications may give you away as a neo-dinosaur. 2. What does it mean to be transparent? We talk about transparency between applications (technology), transparency in processes (strategy) – but real corporate data transparency? Not so much. Human Resources has long been chartered to keep things private, from executive salaries to employee information. Alas, give it up. The “Internetworked” world is, whether we like it or not, transparent. We don’t mean the government overhearing your cell phone conversations; we mean that there is very little about your company or your employees, that is not already available online. And, with much social media, helped by companies such as Yelp and Glassdoor, fueled by geolocation in many apps on mobile devices, employees freely share information that we all may have assumed would be private. It isn’t Big Brother watching you (well, not most of you, at least), it is little brothers and sisters watching everyone around them. And, their data is truly transparent.

3. Human Resources by the numbers? Can you be replaced by an algorithm? Can software better predict who you should hire, retain, and nurture better than you can? Can predictive analytics indeed predict who will succeed, who is a good team player, who will leave the organization, and who will be a great leader? Will this mean that we can replace the “people part” of HR and training because we will be able to calculate good hires, automatically assign appropriate learning to them because we know what they will excel at, algorithmically assign them to teams because we know their social behaviors, automatically plot out promotion paths and salary increases – and eliminate the decisions and indecision that often surrounds the employee acquisition and optimization processes? Human intervention not needed? What are the ramifications for HR? (I see you shaking your head – formulas aren’t going to replace people, you’re thinking – but “what if?”) 4. Learning becomes anywhere, any time. No longer solely the domain of classical courses, learning joins the just-in-time, just-enough category, “nuggetized” to be delivered on any mobile device. “Courselets” will be contextual, embedded in the applications that employees use every day, popping up when needed. Challenges for corporate education managers will be the tracking of “nuggets” completed, especially as they relate to certifications, or compliance-required training. How many “nuggets” add up to a course credit? What kind of tracking may be required for courselets delivered in a clock-in device, a mobile phone or a kiosk? How much learning is indeed “enough?” www.ihrim.org • Workforce Solutions Review • January 2015

5. The universal profile displaces the applications in traditional applicant tracking systems (ATS). Like the common application that high school students can use to apply for colleges, social media has provided a universal application mechanism, displacing the standard application that is generally part of the historic ATS. But beyond just the application form itself, the ability to rely on social sourcing disintermediaries’ job boards, job seekers become the sought-after, causing increased investment in sophisticated marketing to focus on wooing candidates. 6. Business-relevant analytics will likely stem from the combination of HR data with production and financial data. Human Resources will likely be incented to better understand the intersections between the workforce, the products and mission of the organization, and the costs related to an increasingly contingent workforce, the hiring and development of a disparate, global workforce, and the ability to deploy just-in-time talent where and when it is required. Business questions will likely hinge on those analytics, the answers for which far exceed the domain of traditional HR.

About the Author Dr. Katherine Jones is a vice president, focusing on human capital management (HCM) technology research, at Bersin by Deloitte, Deloitte Consulting LLP. She analyzes the underlying technologies and services that support the management of a global workforce, including HR, hiring and performance management and workforce planning. Jones is a veteran in enterprise workforce and talent management applications and a recognized expert in cloud computing. Prior to joining Bersin by Deloitte, she was a research director at the Aberdeen Group for eight years where she established Aberdeen’s HCM practice, focusing on research and consulting services in HR, talent acquisition, workforce management, ERP and mid-market companies. Later, she was the director of Marketing for NetSuite Inc., a cloud-based ERP company. She has written on many areas of talent management, technology and business practices. With over 300 works published to date, she is also a frequent speaker in the U.S. and abroad. Prior to a high-technology career, Jones was a university dean, involved in academic administration, research and teaching. She has a master’s degree and a doctorate from Cornell University. She can be reached at kathjones@deloitte.com.

7. Synthesizing, extracting meaning, and storing unstructured data may prove challenging as candidates apply with video résumés and cover letters, and videoed coaching and performance interviews are maintained. What applications will arise to systematize this data in a user-friendly fashion?

January 2015 • Workforce Solutions Review • www.ihrim.org

8. Crowdsourcing will likely go beyond inputs into product development as younger workers who look to their peers for support and validation apply the theory to everything from résumé creation to informal career development – and within the organization to build teams and optimize employee performance. Replacing the corporate hierarchy with the concept of an amorphous, loosely defined “eco-system” of support, learning and feedback is likely to present challenges, as a rather paternal authority becomes a more social holarchy. 9. Wearable devices will likely enter the increasingly digitized workplace, as the Internet of things infiltrates offices, plant floors, and other production environments. Instead of flicking badges to enter private areas, computerized sleeves or wristbands may allow entry in a movement to increase efficiency and eliminate wasted time while maintaining security. Wearable computing capabilities can increase inclusive hiring policies in their support of physically challenged workers. Where is all this going? The sum of all these disruptors is even more impactful than the ramifications of any one of those listed. Consider: the various technologies that surround a workforce and its management are becoming both easier to use and embedded within the corporate technology infrastructure. No longer just the purview of an HR department, employees can interact with the applications they use on the job and not ever think of any of them as “HR.” What traditionally was designated as HR can pop up in context as it makes sense – learning as needed, kudos as appropriate, and perhaps alerts as to blood pressure rising and other physical information as well. Human Resources technology may simply “disappear” into the corporate infrastructure and become just “part of doing business and coming to work.”

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